A Step-by-Step Guide to Picking the Best Dividend Stocks

Plus the #1 dividend trap to avoid

Todd Lincoln, MBA
Investor’s Handbook

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Photo by micheile henderson on Unsplash

In this article we’re going to dig into one of the most steady and profitable strategies on the stock market: dividend investing.

Let’s walk through four important concepts:

  1. What are dividend stocks?
  2. What should you know about investing in dividend stocks?
  3. Which dividend stocks perform best?
  4. How do you find the best dividend stocks to buy? (A step-by-step guide)

What Are Dividend Stocks?

A dividend stock is any company that pays a regular dividend to its shareholders.

Companies that pay dividends are returning some of their profits to shareholders in the form of a regular cash payment.

Beyond that, I’d narrow the definition even further to focus on companies with a dividend yield of at least 1%. Anything less than 1% is probably not worth owning (from a dividend income perspective).

What Should You Know About Investing in Dividend Stocks?

Many companies (literally thousands) pay dividends to their shareholders on a regular basis.

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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