Here's How You Can Earn 10% of Your Investment Back in Dividends
Do you want to collect 10% of your investment back in dividends? There are stocks that yield that much right now, but there's often a significant risk with seeking out those types of investments. Generally, stocks with such high yields either have unsustainable payout ratios or their shares have been crashing heavily, perhaps because their underlying business is in trouble.
That's why if your goal is to lock in a 10% yield right now, it could be a risky strategy. A safer approach is to invest in dividend growth stocks. Over time, their increases will accumulate, and your recurring dividend income will rise.
When investing in a dividend stock, it's important to look at one that has been increasing its payouts over time. That doesn't necessarily guarantee that it will continue to make dividend hikes in the future, but it's a great indication that the company's management is willing to do so. Plus, it also suggests the business' fundamentals are strong enough to support such moves.
Source Fool.com
