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The Best High-Yield
Dividend Stocks for 2022
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The Best High-Yield Dividend Stocks for 2022
Table of Contents
3 Quality Dividend Stocks Never Go Out of Style
4 Understanding Dividend Yield
5 How to Avoid Yield Traps
6 The 10 Best High-Yield Dividend Stocks for 2022
Quality Dividend Stocks Never Go Out of Style
Dividend stocks are stocks issued by companies who redistribute a portion of its profits to
shareholders on a regular basis. This dividend is usually paid in cash, although sometimes it can
be issued as additional shares of stock. Dividends are typically issued quarterly.
In general, companies that are able and willing to pay a dividend have mature business models with
strong fundamentals that start with solid balance sheets. The stocks are frequently classified as
blue chip stocks because of their reliable performance in both good and bad economic conditions.
However, the best of breed among these companies actively seek to increase the value of its stock
as well as its dividend.
A dividend is a key measurement of a stock's total return. But it does not mean that the company's
stock will outperform the market. That's because paying a dividend creates some price stability for
a stock. That stability means that dividend stocks will typically not grow at the same rate as pure
growth stocks in bull markets. However, during market corrections, that stability also means that
dividend stocks tend to fall less than the broader market.
That being said, dividend stocks are frequently seen as a hedge against risk. And that's why
dividend stocks deserve a place in every investor's portfolio.
Why dividend stocks?
Although no stocks carry zero risk, dividend stocks represent a safer way for investors to invest
their way to wealth. In fact, compared to bonds, dividend stocks have delivered higher (non-risk
adjusted) returns than bonds during all meaningful time periods. For example, the 10-year U.S.
Treasury bond has a yield of about 1.9%. But many high-quality dividend stocks have much higher
Second, bond prices fall as interest rates rise. This means even if the Federal Reserve moves at a
measured pace with rate hikes, it will make bonds less attractive to investors.
What stocks are the best for dividends? The 3 Best ETFs for Dividends iShares High Dividend Equity Fund. If your goal is producing above-average dividend income right now, your first stop should arguably be the iShares High Dividend Equity Fund ( HDV 0.55%). Vanguard Dividend Appreciation ETF. ... SPDR S&P 500 High Dividend ETF. ...
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