High-yield dividend stocks can be risky due to fluctuating yields

From Zacks Investment Research: 2025-03-10 20:16:11

When selecting dividend-paying stocks, investors often look at the annual yield. High-yield stocks may seem like a solid investment for income-focused investors, but it’s important to be cautious. Dividend yields fluctuate with share price movement, and high yields can sometimes be a result of poor share performance. For reliability, consider targeting companies with a history of increasing payouts, like Dividend Aristocrats such as Johnson & Johnson, Coca-Cola, and Procter & Gamble. These companies have consistently raised dividends for at least 25 years. The charts show the annual yields for JNJ, KO, and PG. Dividends offer a passive income stream and protection against drawdowns in other positions.



Read more at Zacks Investment Research: Are High-Yield Dividend Stocks Best for Income-Focused Investors? – March 10, 2025