The best dividend stocks are deceptively simple to find.
At its core, dividend investing involves a buy-and-hold strategy since dividend yields are calculated on an annualized basis. In other words, if you don’t hold for a least one year, you don’t get paid in full.
Also, the best dividend stocks are cash-rich and stable – not explosive growth companies that are plowing every penny into ambitious expansion or research. Remember, every penny a company spends on acquisitions or research is a penny it can’t give back to investors via dividends.
So rather than chase fad stocks or try to time the market, investors simply need to focus on three things to find the best dividend stocks for retirement:
- Stability in any market environment
- Plenty of profits and comfortable cash flows
- A willingness to increase dividends over time
That’s it, really.
Investors chase a lot of stocks because they have big yields or sexy brands, but the bottom line is that these three elements need to be there for you to have confidence in your investments over the long term.
Let me show you what I mean. Here are the five best dividend stocks for retirement income that are case studies in stability, strong balance sheets and dividend growth.