Capital return can matter more than return on capital, in these markets
These three top dividend-paying stocks are a great addition to any passive income portfolio.
Dividend-paying stocks provide long-term investors with much-needed passive income to help offset periodic dips in the value of growth stocks. Indeed, a company that pays a dividend and redistributes capital to shareholders is one that provides a tangible return on investment over a given time period.
Additionally, during times like now, when price fluctuations are the norm, dividend-paying stocks can boost returns while providing a defensive posture for investor portfolios. That’s mostly what the doctor ordered for the average risk-averse investor.
Growth, safety, and current dividend yield are the three factors you should consider when evaluating dividend stocks. A low-yielding stock may be ranked higher due to the company’s dividend growth, whereas a high-yielding income stock may be ranked lower due to safety.
Having tunnel vision on a given company’s current dividend yield is an error that dividend investors frequently make, especially novice ones who are yet to explore the stock market. They disregard the company’s financial stability or the dividend payout ratio in favor of pursuing high yields. However, the biggest yield isn’t always indicative of the finest dividend investments.
Investors all over the world are increasingly exploring dividend investments to help them get through this unsettling time due to market volatility. The adverse effects of inflation have been offset over time by dividend stocks as they offer regular payouts to investors. Here are the top three stocks for a passive income portfolio to aid you in making decisions. Each of these companies happens to be based in Canada and, as such, are dividend-paying stocks, which I think are overlooked right now.
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