Kalkine’s US Dividend Income Report
What is a Dividend Stock?
A dividend stock is a publicly traded or a private company that regularly shares fraction of its profits with the shareholders in the form of periodic dividend payment (quarterly, semi-annual, annual, or special dividend). There are two commonly used forms in which a company can pay dividend to its shareholders:-
In the United States of America companies usually pays quarterly dividend however, other schedules are also possible. Regular dividend paying companies attract individuals who are looking for recurring income from their equity investments. To select a dividend stock investor can generally focus on five broader fundamental metrics- Dividend Yield, Ability of a business to generate free cash flows, Dividend Payout ratio, Dividend payment track record, and Dividend growth.
Why Should You Consider US Dividend Stocks?
Why Dividend Matters?
Price appreciation in stocks is influenced by variety of factors including company performance, macro-economic factors, political environment, and industry specific factors. On the other side, dividends are generally paid regardless of the broader market direction. The dependability of the recurring income is one of the prime reasons to consider dividends when buying stocks. For example, Procter & Gamble Company (NYSE: PG) a giant consumer goods company has paid dividend every year since 1987.
Source: REFINITIV, Analysis by Kalkine Group
Between 2010 to 2022, the average 10-Year US Treasury Bond Yield has been 2.19% (Source: REFINITIV). So, historically a dividend yield between 2% to 4% can be considered decent.
Given this backdrop, key metrics to consider for dividend stocks include:
The Bottom Line
Dividend paying companies might offer a combination of yield, growth, free cash flows and payout ratio. Many dividend-paying companies are in the defensive sector that can withstand economic downturns with less volatility in addition to offering steady income.
To summarize, Kalkine’s US Dividend Income Report is easy to comprehend with deep insights on dividend paying companies. The report aims to cover stocks after an overall assessment of stock specific events, industry prospects, investment outlook, valuation potential, and associated risks, etc.