Dividend stocks are one of the safest methods of earning regular income from the stock market out of the several investment techniques available. Newcomers to the investment processes and experienced investors will find helpful features on 5starsstocks.com dividend stocks to search for the best dividend stocks. In this guide, I’ll explain how the Dividend Stocks investment works through 5StarsStocks.com the platform for investing in the Dividend Stocks, why Dividend Stocks are such a great option, and most importantly how to start investing with me.
What Are Dividend Stocks?
Dividend stocks are shares in companies using part of its profits to pay out shareholders a percentage of profit in the form of dividends. These payments are normally made on an annual basis and serve to give investors their steady cash returns. By definition, while growth stocks are targeted towards capital gains, Dividend stocks are a concept that provide both current income as well as long term stable returns.
Key Types of Dividend Stocks
- Blue-Chip Stocks: Rigid criteria include financial markets that are populated by well developed and existing corporations that have been regularly paying dividends.
- REITs (Real Estate Investment Trusts): Business entities engage in owning and or investing in income-property and are bound to distribute most of their gross earnings.
This year the average dividend yield in the US stock market was about 2,1% but there are many stocks with much higher yields which can be of interest to income investors.
Why Invest in Dividend Stocks?:
Here are seven good reasons why you should include dividend stocks in your investment portfolio.
Consistent Income Stream
Dividends are a regular method of receiving payments, and this is especially desired in the person’s retirement or those that seek income without much effort.
Compounding Growth
The fact that a percentage of the dividend can be reinvested back into the shareholder’s stock experiences a compounding effect. The longer you begin to invest, the longer your dividends help you.
Lower Volatility
Overall, it can be seen that dividend stocks have low relative volatility as compared to stocks which do not pay any dividend. They give reliability especially during volatile periods, and generally those organizations that offer dividends are likely to be more well established.
Long-Term Performance
Long-term creation of wealth has been well demonstrated by Dividend Stocks as opposed to non-dividend Stocks. For instance, the S&P 500 is made up of dividend stocks that afford an average of 9% in annualized gains including both the growth in stock value as well as the dividends.
Top Dividend Stocks on 5StarsStocks.com
5StarsStocks.com have a clear approach towards the selection of Dividend stocks. Here’s a look at the key criteria they use:
- Dividend Yield: The aim is to achieve a relatively high yield and at the same time avoid services whose companies are experiencing difficulties in maintaining or increasing their dividends in the long run, this is why the idea of the 5StarsStocks.com project is based on the search for stock quotes that have a high relative yield combined with the ability to maintain or increase dividends in the future.
- Payout Ratio: The ratio that part of earnings is distributed in the form of dividends to shareholders. The ideal payout ratio should allow the company to pay dividends definitely even at poor economic times.
- Historical Performance: It examines historical data of dividend payout by the firms while focusing on dividing only those corporations that have shown stable or progressive trend in dividend paying capacity.
Dividend Leisure List on 5StarsStocks.com
Here are a few top picks from 5StarsStocks.com, each offering strong dividend yields and growth potential:
1. AT&T
- Dividend Yield: 6.7%
- Why it’s Recommended: Holding a high dividend paying ground, AT&T has always been the favorite for income investors.
- Performance: For over 30 years, despite the difficult situation, AT&T continued to raise the dividends to its shareholders.
2. Johnson & Johnson
- Dividend Yield: 2.8%
- Why it’s Recommended: A steady dividend company, J&J has a record of dividend growth where the company has raised the same for over 60 years.
- Performance: Compared to other firms in its sector, it has proven to be stable therefore would go well with investors searching for stock to invest for long term returns.
Pitfalls Associated with Dividend Stocks
Like with any kind of investment, it’s important to remember that dividend stocks are not without risk. Here are some of the most common:
- Dividend Cuts: Dividends might be cut back or eliminated by firms in the event of poor profitability, or during the occurrence of a business cycle downturn.
- Market Risk: A lot of dividend stocks also experience heavy drop in price during bear runs.
- Interest Rate Risk: It can reduce the demand for dividend stocks as opposed to bonds because they pull up interest rates.
The risk is always there but if the investor takes their time and research and then diversify, it is quite easy to avoid those very risky stocks, that is why at 5StarsStocks.com we bring you detailed stock analysis.
Welcome to 5StarsStocks.com – A Quick Start
Dividend stock investment through 5StarsStocks.com has three easy steps. Here’s how to get started:
- Sign Up: Sign up with the 5StarsStocks.com to get access to best stock lists from professionals.
- Choose Your Stocks: Select your dividend stocks in line with findings specified by the platform with regards to your investment goals.
- Track Your Portfolio: Check your stocks often, because on 5StarsStocks.com you may find information about the changes in performance and dividends.
For novice investors as well as trading professionals, 5StarsStocks.com presents a list of reliable dividend stocks that can readily be invested on to create a sound income-build up on one’s investment.
Conclusion
Dividend stocks are a useful tool to create the wealth through share of in coming steady cash bubbles from the companies. This site is not only helpful in identifying high dividend paying companies, but also in following how these stocks perform and where one can feel comfortable investing. Be it high returns or steady rates 5StarsStocks.com is an excellent tool that will help you get the most out of your investments. Invest today and get to witness the growth of your dividends!
