Dividend-paying stocks are essential for investors seeking steady income and wealth creation. They distribute a portion of earnings, offering reliable cash flow, which is attractive to retirees and those focusing on reinvestment for growth. Research shows that from 1972 to 2022, dividend stocks achieved an average annual return of 10.2%, significantly surpassing 4.3% by non-dividend stocks with reduced volatility. Investors must choose wisely, assessing sustainability, financial health, and sector resilience to avoid unsustainable yields. Monthly dividend stocks can provide consistent income stream options for varied investment strategies.
Selecting sustainable dividend stocks requires evaluating payout ratios, financial health, and growth potential to ensure reliable cash flow and resilience against market fluctuations.
Data from Ned Davis Research shows dividend growers and initiators averaged 10.2% annual returns from 1972 to 2022, outpacing non-dividend stocks at 4.3%, with less volatility.
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