Target Dividend Stocks

Investors prefer an income generating stock, and a dividend paying stock is always a preferable option. Meanwhile, keeping the hard cash in the bank’s locker is much a safer alternative than investing in stocks, so offering higher return on stocks becomes obvious to compensate for the risk undertaken.

Higher dividend growth companies have a better chance to attract investors that in turn provides an impetus to the share price. Through this strategy, the companies bolster investors’ confidence on the stock, thereby persuading them to either buy or hold the scrip instead of selling them. A consistent dividend payment and increasing the same at regular intervals primarily reflect the company’s sound financial position, defined future prospects and intention to enhance shareholders’ value.

Source: Zacks

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