Here’s how we use five simple checks to narrow down dividend stocks for our Income Pot, from EPS growth and net debt to payout ratios and yield.
What happened?
Dividend stocks are often seen as one way for investors to build a stream of passive income over time.
Instead of focusing only on the dividend paid today, the appeal is in companies that may be able to maintain or gradually raise their payouts over the years.
A modest dividend yield today may become more meaningful over time if the company is able to grow its earnings and dividends consistently.
However, not all dividend stocks are built the same, as some companies may be able to deliver a growing stream of income while others could cut payouts when business conditions become more challenging.
That is why I think investors need to look beyond the highest dividend yield when choosing stocks for income....