The best U.S. dividend stocks could be a strong addition to your portfolio

Discover how to find the best U.S. dividend stocks

The best U.S. dividend stocks can be a valuable component of any investment portfolio.

These stocks provide a consistent dividend yield year after year. That’s key to your long-term investment success, because those dividends can contribute as much as a third of your total return.


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Top dividend stocks can produce as much as a third of your total return over long periods. These payouts are drawn from earnings and cash flow and paid to the shareholders of the company. Typically, these dividends are paid quarterly, although they may be paid annually or monthly as well.

At TSI Network, we think investing in dividend stocks is one of the best investment decisions you can make. Dividends serve as a way for companies to share the wealth they accumulate through successfully operating their businesses.

The best U.S. dividend stocks show investment quality

Some good companies reinvest profit instead of paying dividends. But fraudulent and failing companies hardly ever pay dividends. So if you only buy stocks that pay dividends, you’ll automatically stay out of almost all the market’s worst stocks. For a true measure of stability, focus on companies that have maintained or raised their dividends during economic and stock market downturns. These firms leave themselves enough room to handle periods of earnings volatility. By continually rewarding investors, and retaining enough cash to finance their businesses, they provide an attractive mix of safety, income and growth.

The best U.S. dividend stocks can feature hidden assets

When researching the best dividend stocks also take a close look at the balance sheet. Can you spot any hidden assets? For instance, when a company buys real estate, the purchase price goes on its balance sheet as the historical value of the asset. Over a period of years or decades, the market value of that real estate may climb substantially. But the historical purchase price remains unchanged on the balance sheet. You have to look closely to spot this hidden value. At times, the hidden assets in a company’s real estate can even come to exceed the market value of its stock.

Remember these tips about the best U.S. dividend stocks

  • Look for companies that raise their dividends
  • Look for a history of paying a dividend
  • Look for companies with an attractive balance sheet
  • Look for companies whose management have shown public commitment to a dividend
  • Top quality stocks with a high dividend yield dominate their markets
  • High quality stocks + high quality dividends = a winning combo

The biggest risk with the best long-term dividend stocks

When looking for stocks with high dividend yields, you should avoid the temptation of seeking out stocks with the highest yield—simply because they have above-average yields.

That’s because a high yield may signal danger rather than a bargain if it reflects widespread investor skepticism that a company can continue to pay its current dividend.

Dividend cuts will always undermine investor confidence, and can quickly push down a company’s stock price.

Above all, for a true measure of stability, focus on stocks that have a high dividend yield that they have maintained or raised with their dividends during economic or stock-market downturns. That’s because these firms leave themselves enough room to handle periods of earnings volatility. By continually rewarding investors, and retaining enough cash to finance their businesses, they also provide an attractive mix of safety, income and growth.

A track record of dividend payments in a strong sign of reliability and a strong indication that you may be investing in one of the best long-term dividend stocks.

The best U.S. dividend stocks can be a big part of long-term investment gains

If you stick with top quality high dividend yield stocks, the income you earn can supply a significant percentage of your total return—as much as a third of your gains. And at the same time, dividends are more dependable than capital gains as a source of investment income.

Note, though, that when it comes to investment safety, a long history of steady dividends is more important than a current high dividend yield.

Do you hold any of the best U.S. dividend stocks? How have they performed for you? Share your experience with us in the comments.

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