Selecting High-Quality Dividend Stocks
The foundation of any dividend stock investment strategy is selecting high-quality stocks that offer reliable and growing dividends.
Dividend Yield Analysis
Dividend yield is a key metric for evaluating dividend stocks. It is calculated by dividing the annual dividend per share by the stock’s current price. While a high dividend yield can be attractive, it’s important to consider the sustainability of the dividend.
- Example: A stock with a $5 annual dividend and a $100 share price has a dividend yield of 5%. However, a yield significantly higher than the industry average may indicate potential risks or financial instability.