Dividends Make These Two Exchanges Lifelong Holds

Dividend growth investing can be an excellent way for new investors to familiarize themselves with the stock market. Generally, growth dividend-paying stocks offer relative stability thanks to the cash generation required to fund their steadily increasing payouts to shareholders.

However, all dividends are not equal, especially when looking for long-term dividend growth. A simple test of a company's dividend sustainability is to find its payout ratio, or the percentage of net income it sends to shareholders in dividends.

Finding a ratio below 50% often shows a beautiful balance between returning cash to investors and fueling future company growth -- a sweet spot that can deliver solid returns.

Continue reading

Source Fool.com