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How to invest in dividend stocks, a low-risk source of investment income

Posted On: Dec 4, 2020   |   Posted By: Business Insider

How to invest in dividend stocks, a low-risk source of investment income

Summary List Placement There are two main ways to make money in the stock market. One is to buy stocks and sell them later for a profit, or capital gain. The other is to buy stocks and reap income a little at a time via the dividends your shares pay.
Technically, any stock that pays a dividend - a piece of the company's profits - is a dividend stock. In common parlance, though, the term refers to a stock whose shares offer a steady, rich income stream, either to be used now or to be reinvested back into the company.
But how do you determine what's a "good" dividend stock? There are several ways to evaluate them.
Dividend stock basics
Dividends are small per-share income payments of a company's earnings or profits to stockholders. The higher the payment and the more shares you own, the more income you receive. The more profitable the company is, the higher the dividend - in most cases.
The best dividend stocks are also often known as blue chips , representing large, solid, well-established companies that pay...

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