Dividend stocks can offer a wide range of yields. High-yield
stocks generally have dividend yields above 5%. At the same time, low-yielding
stocks, such as those with yields below 2%, can be unattractive for income
investors. But income investors would be wise not to completely dismiss
low-yield stocks just because they provide less investment income.
There is often a trade-off when it comes to dividend stocks,
which is that many low-yield dividend stocks can provide much higher dividend
growth than their higher-yielding counterparts. Stocks with low yields might
pay less income today, but dividend growth stocks could end up generating
higher income for their shareholders over the long run.
Microsoft (NASDAQ:MSFT) is a dividend achiever, having
increased its dividend for over 10 years in a row. Microsoft is a great example
of a stock with a low yield today (1%) but the potential for very high income
many years down the road, thanks to its high dividend growth.
Tech Giant Immune To Coronavirus
Microsoft Corporation, founded in 1975 and headquartered in
Redmond, WA, develops, manufactures and sells both software and hardware to
businesses and consumers. Its offerings include operating systems, business
software, software development tools, video games and gaming hardware, and
cloud services. Core software properties include Windows and Office, while its
hardware brands include Xbox and Surface. Microsoft’s market capitalization is
now $1.6 trillion, compared to annual underlying earnings power of $44+ billion.
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