10 Reasons Why Investors Love Dividend Stocks

And why now might be the perfect time to load up

Todd Lincoln, MBA
Investor’s Handbook

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Photo by Towfiqu barbhuiya on Unsplash

With investors increasingly worried about an economic slowdown or recession, you may be tempted to adjust your portfolio to take a more defensive stance.

Enter dividend stocks: A long-time favorite of cautious, defensive, cash-loving investors, companies that offer steady income are looking increasingly attractive in this uncertain environment.

Let’s outline the basic reasons why investors love owning dividend stocks, and then I’ll share a few resources on how to find them and what type of returns to expect.

First, the basics: Here are ten reasons why investors love dividend stocks.

  1. Steady Income: Dividend stocks provide a regular source of income through periodic cash payments. This is valuable for investors seeking reliable cash flow (e.g., those in retirement).
  2. Performance Stabilization: Dividend income diversifies returns beyond just capital appreciation (i.e., stock price gains). This can help stabilize your overall investment returns, as dividends are less influenced by market fluctuations than stock prices.
  3. Growth Potential: Companies that consistently pay and increase dividends often demonstrate financial stability and strong…

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Todd Lincoln, MBA
Investor’s Handbook

Stock-market investor, battle-scarred entrepreneur, and fireside philosopher. Creator of Investor’s Handbook: https://medium.com/the-investors-handbook