Dividend Stocks: A Great Addition To Your Portfolio

Dividend stocks can be a great addition to your portfolio, especially pharmaceutical dividend stocks that offer a bit of stability in rocky times. People still get sick during recessions. And the dividend allows investors to be patient, collecting the dividend while they wait for drugs to be developed. Drug development certainly isn't a linear path. The trick to buying dividend stocks isn't to look for the ones with the highest yield.

Dividends aren't guaranteed, and when dividends are really high, there's often a reason investors are demanding a higher yield: They're worried about the underlying stock. For instance, GlaxoSmithKline's (NYSE: GSK) dividend yield is around 4.5%. An oldie but a goodie: Johnson & Johnson (NYSE: JNJ) has increased its dividend for 51 consecutive years. Dividend stock on the mend: After cutting its dividend in half when it acquired Wyeth in 2009, Pfizer (NYSE: PFE) has increased its divided steadily over the last few years.

Source: Motley Fool

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