Are you searching for a company to invest in that offers a reliable source of money? Stocks that include high yield dividends can be a great option for you. They work by increasing their payouts slowly, that way investors can rely on them.
These stocks may involve much less risk than growth stocks and are considered a safe investment for many people, outside of day trading stocks if the underlying dividend payout is safe. This is some of the information you are going to need to prepare to invest in high yield dividend stocks.
Know How Much to Buy
Before you get involved, you are going to want to make some plans for yourself. You want a broad and diverse portfolio to minimize any risks. Decide before you buy how much of your portfolio will make up a stock.
What Makes a “High Dividend” Stock
A stock is considered to have a high dividend if it is returning over 4%. However, sometimes higher numbers, such as anything yielding you dividend over 10%, can be too good to be true- and will eventually crash.
When investing in a high dividend stock, you want to make sure that the stock is reliable, so that you do not waste your hard-earned money. These are some steady stock options.
IBM 5.30% Yield
International Business Machines, or IBM, is yielding over 5% and has been for the last 24 years. This seems to point to IBM stock being a safe option in the market.
IBM has been running for many years and as a result as a large number of returning customers, making up for 60% of their business. They are reliable and always willing to adapt to new changes.
Their dividend is covered well by free cash flow, shows potential for growth in the future, and has been consistently stable. Overall, IBM is a reliable choice for an investment.
AbbVie 5.1% Yield
AbbVie has been raising their dividend payouts consecutively for the last 48 years- which is no small feat. They have had a free cash flow for over the past year that more than covers their dividends.
Their portfolio is backed by necessary drugs that aid in cancer and arthritis treatments. Because of this, you can expect AbbVie to be a reliable stock choice for a long time.
Verizon 4.2% Yield
For the remaining part of 2020, Verizon is going to work on setting up the rest of its 5G network. They have been an option for cable and telephone services for many years, and show no signs of stopping.
The stock in this company would be reliable and is only raising- Verizon has been mostly increasing their payouts for the last 10 or so years.
Realty Income 4.5% Yield
This company has earned the title “The Monthly Dividend Company”, due to how investors receive their yields on a month to month basis- a benefit in the eyes of many. It is extremely reliable and you can expect timely payouts for your stock every 30 days.
Realty Income is made up of necessary businesses, such as drug stores and other convenience stores, making them able to successfully survive the tough times of the pandemic.
Because of that, professionals are referring to it as one of the safest high dividend stocks on the market. They have successfully paid all dividends for the last 600+ months and are showing no signs of slowing down.
The best way to set up an effective and reliable portfolio is to make it diverse. Stocks with high dividends can help you turn a profit during these uncertain times as well, plus, these companies have all proven themselves to be reliable in the past.
Skylar Hammond is a writer for True Trader who specializes in topics such as stock trading, personal finance, and forex. He focuses on helping beginners and experts alike learn more about the market and improve their trading skills.