What to Look for in a Dividend Stock

What to Look for in a Dividend Stock
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Dividend payments provide three major benefits to shareholders. The first one is obvious: They put more money in your pocket. If you’re up on your position, that means icing on the cake; if not, then a dividend is a hedge against your current unrealized losses. Secondly, dividend payments act as a beacon for Wall Street and investors, alerting them to the sustainability and profitability of a company’s business model. If a business has consistently paid a dividend to its shareholders and raised that dividend on a somewhat regular basis, then it’s signaling to investors that it has confidence in its long-term business model. In essence, why would a business share its profits with investors if it feared for its intermediate or even long-term profitability? Lastly, what makes dividends such a transformative investing tool is that they can be reinvested back into the same stock. Using your payout to purchase additional shares of stock can supercharge your portfolio and, depending on your time frame to retirement, multiply your nest egg.

An increase in long-term interest rates rattled investors on Tuesday, nudging major United States stock indexes lower for the second day in a row. Traders around the world have been selling off government bonds in recent weeks. That trend accelerated on Tuesday, bringing down bond prices and, in turn, driving up the benchmark United States bond yield to its highest level since late November.

Kinder Morgan (NYSE: KMI ) is one of my favorite high-yield dividend growth stocks and a major reason for this is because of how well it’s been able to handle the oil crash. Let’s look at five key facts from Kinder’s recent conference call that show why the company is likely to thrive even in a world of lower energy prices. “Our average realized oil price per barrel in our CO2 segment was $72.62 in the first quarter of ’15, versus $91.89 in the same quarter a year ago. And the average Henry Hub price for natural gas was $2.98 in the first quarter of ’15 versus $4.94 in the first quarter of ‘14.”Richard Kinder, founder, chairman, and CEO.

Dividends and Interest Rates
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Profitable Investing Tips

Profitable Investing Tips

ProfitableInvestingTips.com is an informational website for men and women who want to discover trading & investing products and strategies and how to use them.

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