Higher Yields May Be A Warning Of Trouble Ahead

While high dividend yields can be attractive, that shouldn’t be the only thing you’re looking for when picking stocks. With some companies, a high dividend yield isn’t always a good thing: Sometimes a high yield is actually caused by a drop in stock price. (In the case of CTL, after the plunge, the dividend yield rose from 6.9% to over 9%).

Moving beyond the yield and current dividend payment, you want to look at the company as a whole and its history of dividend payments. Consistent and steadily increasing payments are a prime sign of a strong company that makes dividends work for you.

Source: InvestorPlace

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