The Best Dividend Stock

The power of dividends has helped millions of investors turn savings into true wealth. But thousands of stocks pay dividends. How do you know which dividend stock is right for you? The first thing you need to realize about dividend stocks is that companies pay dividends for a bunch of different reasons. That means that if you just look at the dividend yields of two different stocks and try to compare them, you might end up making big mistakes about which one is more promising.

Which type of dividend stock you want to own depends on your individual circumstances. If you don't need huge amounts of income right now, then more modest payers with opportunities for future growth are your best bet. To maximize income, though, some higher yielding stocks will serve you well, as long as you understand the prospective pitfalls. Don't let dividends confuse you. Once you understand why stocks pay dividends, you'll be able to separate the best from the rest and buy stocks that work for your needs.

Source: Motley Fool

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