2 Stocks to Buy With Dividends Yielding More Than 3%
Dividend yield isn't everything in a dividend stock, but it's probably the most important factor investors look at when considering a dividend stock. The dividend yield is the amount a company pays to shareholders expressed as a percentage of the stock price. The reason it's so important is that in contrast to the amount of the actual dividend, it's all about the return on the amount you put in.
If a company pays $1, but you have to put in $100 to get that dollar, your money isn't working nearly as efficiently as if you'd invested $50 to get $0.75. In the first case, you're making 1%, and in the second case, you're making 1.5%. Your money is working harder for you.
Yield isn't everything, though. An extremely high yield could signal potential problems in a company, and sometimes comes with risk and speculation. A moderately high yield, along with stability and dependability, is usually the best dividend recipe for most individual investors.
Source Fool.com
