High-yield dividend stocks offer relatively high dividend yields compared to the average dividend stock. Generally, I view a high-yield dividend to be above the 4-5% range.
Importantly, high-yield dividend stocks offer an attractive source of passive income. The companies that provide high yields tend to have solid long-term earnings and cash flow generation, allowing a more significant portion of their profits to be returned to shareholders.
However, higher yields also correlate with higher risks. Companies that offer very high dividends often do so to attract investor capital in the face of broader business issues. The result is that such dividends can be cut, and may therefore be somewhat less stable.
With that said, let’s dive into three high-yield dividend stocks I’d put in the “buy now and hold forever” bucket.
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