The Secret of Dividend Investing

While there really is no “secret sauce” for investing in dividend growth stocks, here are some basic tips to go along with my article on How To Choose The Best Dividend Stocks.

There is no magic number to look for (or avoid, for that matter),but the article explains the power of dividends and provides a cheat sheet for choosing great dividend payers:

  • Real estate investment trusts with a funds-from-operations payout ratio below 85%.
  • Higher-growth common stocks that pay out less than 50% of free cash flow (FCF).
  • Banks that pay out less than 60% of FCF.
  • Regulated utilities that pay out less than 80% of FCF.

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