Dividend-seeking investors may seek high-yield dividend stocks, such as those listed on this page. Still, another factor needs to be considered when investing in dividends: consistency, which is especially important for fixed-income investors. And that’s where the Dividend Aristocrats really shine.
The S&P 500 Dividend Aristocrats is known as a market index that includes certain companies from the S&P 500. To be included, companies must:
- Has been raising dividends annually for the past 25 years.
- Have at least $ 3 billion
- The average daily trading value must be at least 5 million.
The index methodology also requires the inclusion of at least 40 companies, and no sector may account for more than 30% of the index’s weight.
So what does this mean for investors? Dividend aristocrats are large companies with reliable dividend payments and high liquidity. The entire index may offer more diversification than high-yield dividend indices (which are typically critical to the financial and utility sectors).
Investors can choose and choose the specific Dividend Aristocrats to invest in, or there are ETFs with similar reliability criteria.
There is also the S&P 500 High-Yield Dividend Aristocrats Index, which has slightly different criteria.
How to invest in dividend stocks
Creating a portfolio of individual dividend stocks takes time and effort, but it is worth it for many investors. Here’s how to buy dividend shares:
1. Find dividend-paying stocks:
You can search for stocks that pay dividends on many financial websites as well as your online broker’s website. We have also included a large list of dividend shares below.
2. Evaluate inventory:
To look at the high-dividend stock hood, start by comparing dividend yields between similar stocks.
If a firm’s dividend yield is much higher than that of similar companies, it could be a red flag.
At least it’s worth exploring further about the company and the security of the dividends.
Then look at the payout ratio, which shows how much of the company’s income will go to dividends.
An excessive payout ratio – typically above 80%, although it can vary from industry to industry – means that a company spends a large proportion of its revenue on dividends.
In some cases, the dividend payout ratio may exceed 100%, which means that a company may be indebted to pay dividends. (Read the full guide on exploring promotions.)
3. Determine how many shares you want to buy:
If you are buying individual stocks, you need diversification, so you will need to determine what percentage of your portfolio is in each stock.
For example, you buy 20 shares, each of which you can put 5% of your portfolio.
However, if stocks are riskier, you may want to buy them less and spend more money on a safer choice. If you plan to reinvest your dividends, you will need to recalculate your cost base, the amount you originally paid for the shares.
The most important thing when buying dividend shares is the security of the dividends.
Dividend yields above 4% should be carefully considered; those above 10% are firmly in the high-risk area.
Among other things, excessive dividend yields may mean that the payout is unsustainable or that investors sell shares, lowering their share price and thereby increasing dividend yields.
List of Top 23 high dividend shares
Below is a list of the 23 major dividend shares at U.S. headquarters, broken down by dividend yield. The dividend below is the amount payable for the period, not annually.
To make this list, we take into account the growth rate of dividends over the past five years and the percentage of dividends paid out, excluding dividend yield and amount.
Share data was updated on Feb, 1st 2022.
Disclosure: At the time of initial publication, the author did not hold any position in the above investments.
We hope you enjoyed this article… What are your thoughts on the Top 23 High-Dividend Stocks to Invest in 2022?
Please feel free to share with us in the comments section below.
We strive to provide the latest valuable information for our readers with accuracy and fairness. If you would like to add to this post or advertise with us, don’t hesitate to contact us. If you see something that doesn’t look right, contact us!