Dividend investing can be a good investment strategy and a near effortless way to earn passive income.
However, not all dividend stocks are created equal. They can still be risky if you pick the wrong ones. Here's how to invest in them.Instead of focusing just on dividend yield, a better strategy would be to choose dividend stocks that provide steady income for the long term.Dividend investors who are in it for the long term would tend to prefer a company that pays out dividends regularly than one that pays a high dividend from time to time.
In general, a ratio of 50 per cent or more is considered high as that means more than half of the company's profits are paid to shareholders as dividends. It's important to look at a stock's dividend growth rate over several years rather than just the past year so you can get a sense of the company's growth trajectory and potential.
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