Income stocks are stocks that produce above-average income, usually in the form of dividends.
An income stock usually has two distinct traits. The first is a high dividend yield. You can identify income stocks by their high dividend yields (the percentage you get when you divide a company’s current yearly payment by its share price). For example, stocks with a dividend yield higher than, say, 3% would typically be attractive to an income-seeking investor. Investors should note that a very high dividend yield can also be a warning sign of trouble (such as an imminent dividend cut).
Apart from a high dividend yield, you should look for a second trait: stocks that have a long history of paying (and raising) their dividends. For a true measure of stability, focus on those companies that have maintained or raised their dividends during economic downturns or recessions.
If you’re an income stock investor, you may wish to place more emphasis on Utilities and Canadian banks. That’s because these firms generally pay high, secure dividends, and have long histories of raising their payments, even during downturns. However, you’ll still want to make sure your portfolio is well-diversified across most if not all of the five sectors.
We feel that income stocks have a role to play in most investors’ portfolios. For the safest investments, follow TSI Network’s three-part Successful Investor strategy:
Invest mainly in well-established companies;
Spread your money out across most if not all of the five main economic sectors (Manufacturing & Industry; Resources & Commodities; the Consumer sector; Finance; Utilities);
Downplay or avoid stocks in the broker/media limelight.
A: BMO International Dividend ETF, $21.63, symbol ZDI on Toronto (Units outstanding: 20.1 million; Market cap: $434.8 million; www.bmoetfs.cawww.bmoetfs.ca), offers exposure to a portfolio of high-yield dividend-paying companies in developed markets. The fund excludes North American firms but can include foreign ADRs trading on U.S…. Read More
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To build a strong portfolio, we advise investors to look for blue chip companies that are likely to pay off if business and the… Read More
Developing a profitable dividend stock strategy starts with these key tips—including looking for indicators of dividend sustainability
Dividend stocks are an important contributor to your long-term gains, and dividend-paying stocks tend to expose you to less risk than non-dividend-payers. That’s why the majority of your stocks… Read More
A mix of growth, value, and dividend-paying Canadian stock picks will let you build a diversified portfolio with strong long-term prospects
Selecting Canadian stock picks for a diversified portfolio begins with spreading investments across most if not all of the five main economic sectors. As well,… Read More
Your best portfolio pick will almost always come from a high-quality stock with a history of paying dividends
Investing is relative, not absolute. It’s an art, not a science. Every stock offers a balance of risk and potential reward. Above all, you’ll want to make sure… Read More
Welcome to your latest issue of Dividend Advisor., and our focus on income stocks aimed at seeing you through the current market downturn and on to future gains.
With the COVID-19 market drop in March, the yields of most dividend payers have risen—in many cases, dramatically.
Ordinarily in… Read More
The best income investments are companies with a long history of cash flow and dividends—and that offer good value
Income investing is an investment strategy that aims to provide current income for investors, even at the expense of some long-term capital appreciation. An emphasis on this… Read More
Find and invest in companies that pay dividends and you will be putting your money behind stocks that come with a history of success with lower amounts of risk
Income stocks are those that produce above-average income, usually in the form of dividends.
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