Dividend Stocks for Safety and Yield

In economic times like these, safe dividend stocks that produce high yields are good buys. This segment of the investment sphere allows you to get a slight return on investment and wait for the market to heat up again. A good place to start looking for stocks like these is to find large-cap companies that have given decent, consistent dividends for years. These companies will offer a much safer investment than trying to predict the rise and fall of stock prices in a manic market. Dividends are indicative of how much cash the company has on hand, so a company with a lot of cash can sustain dividend payments in the short term.

Dividends are paid with cash, not earnings or income. To truly find a great dividend stock, a company must have stable earnings stemming from competitive advantages in the industry to keep this cash coming in. A good metric to judge a company on is ROA since it includes cash in the equation. ROA can tell how good a company is at turning its investments into profit.

Source: Seeking Alpha

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