Dividend stock is an excellent way to boost your investment portfolio.
Q: What is a dividend stock?
Sheldon: A dividend stock is a company that pays out part of its earnings directly to its shareholders. It’s a form of income.
Q: What are the good, bad and ugly points of owning dividend stock?
Sheldon: One thing is you shouldn’t just look at the percentage of the dividend. There’s a risk that a company is paying out too much of its earnings in dividends. And there’s also a risk that money could be used for better purposes.Q: What should a buyer look at in a dividend stock for its performance?
Sheldon: Well, one thing is to look at the consistency of that stock. How long has that stock been paid, what have the increases been, and is there the chance that the dividend is going to continue to increase.
Q: Is a changing dividend stock a good or bad thing? Should it be steady number or is it ok for it to fluctuate up and down?
Sheldon: Well that’s really changed over the years. Today it’s the high quality companies that are paying out dividends. In past years, it was done to cover over the fact that maybe the company wasn’t growing all that well and was a satisfying people or keeping them in the dividend stock.