Here's What Safe Dividend Stocks All Have in Common
Dividend stocks are a popular investment strategy, and rightly so. Who doesn't like getting paid passive income -- dividend checks that keep coming, paying your bills, or being reinvested to make that snowball just a tad bigger? But not all dividend stocks are created equal; knowing the difference between the good and bad apples can save your portfolio some pain.
There isn't one rule that applies to all dividend stocks, but some key components make a company a safe dividend investment. Know and use these tips, and you'll build a portfolio that rewards you with reliable and growing dividends.
First, understand what dividends are and where they come from. A company paying a dividend means the business sends you a portion of its profits. Dividends aren't accounting voodoo; they are cash payments. In other words, a company can't fake a dividend; it must have the cash to pay it.
Source Fool.com
