S&P 500   4,689.84 (+0.07%)
DOW   35,682.42 (-0.10%)
QQQ   398.03 (+0.05%)
AAPL   174.51 (+1.95%)
MSFT   331.78 (-0.94%)
FB   331.87 (+2.81%)
GOOGL   2,946.41 (+0.03%)
AMZN   3,519.24 (-0.11%)
TSLA   1,057.36 (+0.53%)
NVDA   319.43 (-1.49%)
BABA   126.37 (+0.66%)
NIO   34.93 (+5.46%)
CGC   11.16 (+4.89%)
AMD   144.85 (+0.00%)
GE   98.62 (+1.10%)
MU   85.69 (-0.16%)
T   23.11 (+0.13%)
F   19.90 (-0.30%)
DIS   153.12 (+1.53%)
PFE   51.25 (-0.91%)
AMC   33.25 (+7.12%)
ACB   6.69 (+4.86%)
BA   212.34 (+1.68%)
S&P 500   4,689.84 (+0.07%)
DOW   35,682.42 (-0.10%)
QQQ   398.03 (+0.05%)
AAPL   174.51 (+1.95%)
MSFT   331.78 (-0.94%)
FB   331.87 (+2.81%)
GOOGL   2,946.41 (+0.03%)
AMZN   3,519.24 (-0.11%)
TSLA   1,057.36 (+0.53%)
NVDA   319.43 (-1.49%)
BABA   126.37 (+0.66%)
NIO   34.93 (+5.46%)
CGC   11.16 (+4.89%)
AMD   144.85 (+0.00%)
GE   98.62 (+1.10%)
MU   85.69 (-0.16%)
T   23.11 (+0.13%)
F   19.90 (-0.30%)
DIS   153.12 (+1.53%)
PFE   51.25 (-0.91%)
AMC   33.25 (+7.12%)
ACB   6.69 (+4.86%)
BA   212.34 (+1.68%)
S&P 500   4,689.84 (+0.07%)
DOW   35,682.42 (-0.10%)
QQQ   398.03 (+0.05%)
AAPL   174.51 (+1.95%)
MSFT   331.78 (-0.94%)
FB   331.87 (+2.81%)
GOOGL   2,946.41 (+0.03%)
AMZN   3,519.24 (-0.11%)
TSLA   1,057.36 (+0.53%)
NVDA   319.43 (-1.49%)
BABA   126.37 (+0.66%)
NIO   34.93 (+5.46%)
CGC   11.16 (+4.89%)
AMD   144.85 (+0.00%)
GE   98.62 (+1.10%)
MU   85.69 (-0.16%)
T   23.11 (+0.13%)
F   19.90 (-0.30%)
DIS   153.12 (+1.53%)
PFE   51.25 (-0.91%)
AMC   33.25 (+7.12%)
ACB   6.69 (+4.86%)
BA   212.34 (+1.68%)
S&P 500   4,689.84 (+0.07%)
DOW   35,682.42 (-0.10%)
QQQ   398.03 (+0.05%)
AAPL   174.51 (+1.95%)
MSFT   331.78 (-0.94%)
FB   331.87 (+2.81%)
GOOGL   2,946.41 (+0.03%)
AMZN   3,519.24 (-0.11%)
TSLA   1,057.36 (+0.53%)
NVDA   319.43 (-1.49%)
BABA   126.37 (+0.66%)
NIO   34.93 (+5.46%)
CGC   11.16 (+4.89%)
AMD   144.85 (+0.00%)
GE   98.62 (+1.10%)
MU   85.69 (-0.16%)
T   23.11 (+0.13%)
F   19.90 (-0.30%)
DIS   153.12 (+1.53%)
PFE   51.25 (-0.91%)
AMC   33.25 (+7.12%)
ACB   6.69 (+4.86%)
BA   212.34 (+1.68%)

Recent Dividend Increases

Below you will find a list of publicly-traded companies, exchange traded funds (ETFs) and real-estate investment trusts (REITs) that have recently increased the amount of their dividend payments. Learn how to invest in stocks with increasing dividends.

MarketRank evaluates a company based on community opinion, dividend strength, institutional and insider ownership, earnings and valuation, and analysts forecasts.
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CompanyAnnouncement DateAmountPrevious AmountIncrease AmountYieldEx-DatePayable DateIndicator(s)
EPRT
Essential Properties Realty Trust
12/7/2021$0.26$0.254.00%3.6%12/30/20211/13/2022Analyst Revision
CHH
Choice Hotels International
12/7/2021$0.2375$0.22505.56%0.6%1/3/20221/18/2022Analyst Revision
BKE
The Buckle
12/7/2021$0.35$0.336.06%2.7%12/17/202112/29/2021Positive News
RWT
Redwood Trust
12/7/2021$0.23$0.219.52%6.78%12/28/2021News Coverage
Positive News
MAA
Mid-America Apartment Communities
12/7/2021$1.0875$1.02506.10%2.02%1/31/2022Analyst Report
Analyst Revision
News Coverage
PNR
Pentair
12/7/2021$0.21$0.205.00%1.14%2/4/2022
THG
The Hanover Insurance Group
12/6/2021$0.75$0.707.14%2.29%12/15/202112/30/2021
FUND
Sprott Focus Trust
12/6/2021$0.4107$0.1669146.08%8.8%12/10/202112/23/2021Positive News
SLG
SL Green Realty
12/6/2021$0.3108$0.30332.47%5.0%12/14/20211/18/2022Analyst Report
Analyst Revision
News Coverage
RCII
Rent-A-Center
12/6/2021$0.34$0.319.68%2.9%12/15/20211/13/2022
ARE
Alexandria Real Estate Equities
12/6/2021$1.15$1.122.68%2.24%12/30/20211/14/2022Analyst Report
MORN
Morningstar
12/3/2021$0.36$0.315014.29%0.46%1/6/20221/31/2022Insider Selling
GGG
Graco
12/3/2021$0.21$0.187512.00%1.09%1/14/20222/2/2022Analyst Revision
BMO
Bank of Montreal
12/3/2021$1.0410$0.848022.76%3.87%1/31/20222/28/2022Earnings Report
Analyst Report
Analyst Revision
AES
The AES
12/3/2021$0.1580$0.15054.98%2.66%1/31/20222/15/2022Analyst Upgrade
Analyst Revision
PCH
PotlatchDeltic
12/3/2021$4.00$3.5412.99%2.8%12/14/202112/31/2021Analyst Upgrade
AMGN
Amgen
12/3/2021$1.94$1.7610.23%3.83%2/14/20223/8/2022Analyst Report
TD
The Toronto-Dominion Bank
12/3/2021$0.6958$0.632010.10%3.4%1/7/20221/31/2022Earnings Report
Analyst Downgrade
Analyst Revision
JHS
John Hancock Income Securities Trust
12/3/2021$0.8103$0.2180271.70%5.21%12/10/202112/31/2021Positive News
BTO
John Hancock Financial Opportunities Fund
12/3/2021$0.55$0.3748.65%5.31%12/10/202112/31/2021News Coverage
JBT
John Bean Technologies
12/3/2021$0.10$0.0911.11%0.26%12/10/202112/27/2021
FIZZ
National Beverage
12/2/2021$3.00$1.50100.00%12/10/20212/11/2022Upcoming Earnings
WEC
WEC Energy Group
12/2/2021$0.7280$0.67757.45%3.19%2/11/20223/1/2022
RJF
Raymond James
12/2/2021$0.34$0.2630.77%1.42%1/3/20221/18/2022Analyst Report
Insider Selling
PDBC
Invesco Optimum Yield Diversified Commodity Strategy No K-1 ETF
12/2/2021$5.39$0.0010538,900.00%36.17%12/3/202112/10/2021Positive News
HI
Hillenbrand
12/2/2021$0.2180$0.21501.40%1.83%12/16/202112/30/2021Analyst Downgrade
VRTS
Virtus Investment Partners
12/2/2021$1.50$0.8282.93%1.98%1/27/20222/11/2022Positive News
CM
Canadian Imperial Bank of Commerce
12/2/2021$1.26$1.15618.99%4.7%12/28/20211/28/2022Earnings Report
Analyst Upgrade
Analyst Revision
NUE
Nucor
12/2/2021$0.50$0.405023.46%1.86%12/30/20212/11/2022Buyback Announcement
EMN
Eastman Chemical
12/2/2021$0.76$0.6910.14%2.89%12/14/20211/7/2022Analyst Report
News Coverage
ECL
Ecolab
12/2/2021$0.51$0.486.25%0.91%12/13/20211/18/2022
OC
Owens Corning
12/2/2021$0.35$0.2634.62%1.58%1/6/20221/21/2022Insider Selling
KEN
Kenon
12/2/2021$3.50$1.8688.17%12.2%1/18/20221/27/2022
UHT
Universal Health Realty Income Trust
12/1/2021$0.7050$0.700.71%4.88%12/14/202112/30/2021News Coverage
Positive News
EGP
EastGroup Properties
12/1/2021$1.10$0.9022.22%2.1%12/30/20211/15/2022Analyst Upgrade
CULP
Culp
12/1/2021$0.1150$0.114.55%4.34%1/10/20221/19/2022Earnings Report
Analyst Downgrade
Insider Buying
RY
Royal Bank of Canada
12/1/2021$0.9390$0.85809.44%3.83%1/25/20222/24/2022Analyst Downgrade
Analyst Revision
PHM
PulteGroup
12/1/2021$0.15$0.147.14%1.2%12/14/20211/4/2022
PWR
Quanta Services
12/1/2021$0.07$0.0616.67%0.25%1/3/20221/14/2022
BNS
The Bank of Nova Scotia
12/1/2021$0.7817$0.709510.18%4.4%1/3/20221/27/2022
SAR
Saratoga Investment
12/1/2021$0.53$0.521.92%6.7%1/3/20221/19/2022Analyst Upgrade
RGCO
RGC Resources
12/1/2021$0.1950$0.18505.41%3.6%1/14/20222/1/2022Analyst Downgrade
GWRS
Global Water Resources
12/1/2021$0.0246$0.02431.23%1.6%12/15/202112/30/2021Positive News
ETD
Ethan Allen Interiors
12/1/2021$0.29$0.2516.00%5.2%12/13/20211/5/2022
STC
Stewart Information Services
12/1/2021$1.50$0.33354.55%8.42%12/14/202112/31/2021
WINC
Western Asset Short Duration Income ETF
11/30/2021$0.04$0.03708.11%1.86%12/1/202112/6/2021Positive News
WBND
Western Asset Total Return ETF
11/30/2021$0.07$0.059018.64%3.18%12/1/202112/6/2021Positive News
USIG
iShares Broad USD Investment Grade Corporate Bond ETF
11/30/2021$0.1110$0.10505.71%2.22%12/1/202112/7/2021
TCFC
The Community Financial
11/30/2021$0.1750$0.1516.67%1.86%1/7/20221/24/2022
SUSC
iShares ESG USD Corporate Bond ETF
11/30/2021$0.1010$0.0460119.57%4.42%12/1/202112/7/2021
SUSB
iShares ESG 1-5 Year USD Corporate Bond ETF
11/30/2021$0.0630$0.0230173.91%2.95%12/1/202112/7/2021Positive News
SLQD
iShares 0-5 Year Investment Grade Corporate Bond ETF
11/30/2021$0.1280$0.0560128.57%3.01%12/1/202112/7/2021Positive News
SHY
iShares 1-3 Year Treasury Bond ETF
11/30/2021$0.05$0.0110354.55%0.7%12/1/202112/7/2021Positive News
MRK
Merck & Co., Inc.
11/30/2021$0.69$0.656.15%3.71%12/14/20211/7/2022Analyst Downgrade
ISTB
iShares Core 1-5 Year USD Bond ETF
11/30/2021$0.0880$0.065035.38%2.09%12/1/202112/7/2021Positive News
IGSB
iShares 1-5 Year Investment Grade Corporate Bond ETF
11/30/2021$0.1550$0.0670131.34%3.45%12/1/202112/7/2021Positive News
IGIB
iShares 5-10 Year Investment Grade Corporate Bond ETF
11/30/2021$0.2420$0.1110118.02%4.9%12/1/202112/7/2021
IEF
iShares 7-10 Year Treasury Bond ETF
11/30/2021$0.0880$0.08108.64%0.91%12/1/202112/7/2021Positive News
IBTG
iShares iBonds Dec 2026 Term Treasury ETF
11/30/2021$0.0140$0.01307.69%0.66%12/1/202112/7/2021Positive News
HYXF
iShares ESG Advanced High Yield Corporate Bond ETF
11/30/2021$0.4650$0.1670178.44%10.98%12/1/202112/7/2021Positive News
MKC
McCormick & Company, Incorporated
11/30/2021$0.37$0.348.82%1.72%12/30/20211/10/2022
MA
Mastercard
11/30/2021$0.49$0.4411.36%0.62%1/6/20222/9/2022Buyback Announcement
VWOB
Vanguard Emerging Markets Government Bond Index Fund ETF Shares
11/29/2021$0.2760$0.26205.34%4.33%12/1/202112/6/2021Positive News
VMBS
Vanguard Mortgage-Backed Securities Index Fund ETF Shares
11/29/2021$0.05$0.04804.17%1.13%12/1/202112/6/2021Positive News
QQQJ
Invesco NASDAQ Next Gen 100 ETF
11/29/2021$0.21$0.0240775.00%2.48%12/20/202112/31/2021Positive News
IHYF
Invesco High Yield Bond Factor ETF
11/29/2021$0.11$0.089023.60%5.25%12/20/202112/31/2021Positive News
GBDC
Golub Capital BDC
11/29/2021$0.30$0.293.45%7.91%12/9/202112/30/2021
FCPT
Four Corners Property Trust
11/29/2021$0.3330$0.31705.05%4.93%12/31/20211/14/2022Positive News
BSMS
Invesco BulletShares (R) 2028 Municipal Bond ETF
11/29/2021$0.03$0.027011.11%1.37%12/20/202112/31/2021Positive News
BSJS
Invesco BulletShares 2028 High Yield Corporate Bond ETF
11/29/2021$0.12$0.088036.36%5.79%12/20/202112/31/2021Positive News
BND
Vanguard Total Bond Market Index Fund ETF Shares
11/29/2021$0.1350$0.13400.75%1.9%12/1/202112/6/2021
PKX
POSCO
11/26/2021$0.8760$0.664031.93%6.31%9/29/202112/3/2021
GOGL
Golden Ocean Group
11/26/2021$0.85$0.5070.00%24.1%12/8/202112/16/2021Gap Down
FMNB
Farmers National Banc
11/26/2021$0.14$0.1127.27%3.2%12/9/202112/31/2021
NXQ
Nuveen Select Tax-Free Income Portfolio 2
11/24/2021$0.0547$0.042030.24%4.3%12/2/202112/31/2021
NXR
Nuveen Select Tax-Free Income Portfolio 3
11/24/2021$0.0956$0.0470103.40%6.9%12/2/202112/31/2021
GGB
Gerdau
11/23/2021$0.2577$0.0363609.92%6.05%11/8/202111/23/2021
GGB
Gerdau
11/23/2021$0.0363$0.03455.13%0.85%11/8/202111/23/2021
SQFT
Presidio Property Trust
11/23/2021$0.1040$0.10300.97%10.83%12/3/202112/20/2021Positive News
HIFS
Hingham Institution for Savings
11/23/2021$1.30$1.1711.11%0.5%12/31/20211/12/2022
MOV
Movado Group
11/23/2021$0.25$0.2025.00%2.24%12/2/202112/17/2021Insider Selling
GES
Guess?
11/23/2021$0.2250$0.1125100.00%4.0%12/7/202112/24/2021Options Volume
PBR
Petróleo Brasileiro S.A. - Petrobras
11/23/2021$0.3810$0.285933.24%19.4%12/2/202112/22/2021
CCU
Compañía Cervecerías Unidas
11/23/2021$0.7066$0.2362199.11%7.4%11/24/202111/24/2021
FGBI
First Guaranty Bancshares
11/23/2021$0.16$0.14559.97%3.1%12/22/202112/31/2021
CHCO
City
11/23/2021$0.60$0.583.45%2.9%1/13/20221/31/2022
TRP
TC Energy
11/23/2021$0.6986$0.575021.49%5.63%11/29/202112/31/2021
AEL
American Equity Investment Life
11/23/2021$0.34$0.1888.89%0.97%11/26/202112/13/2021
YORW
The York Water
11/22/2021$0.1950$0.18744.06%1.63%12/30/20211/14/2022Positive News
SJI
South Jersey Industries
11/22/2021$0.31$0.30302.31%5.04%12/9/202112/29/2021
PINE
Alpine Income Property Trust
11/22/2021$0.27$0.25505.88%5.95%12/8/202112/30/2021Analyst Upgrade
Positive News
HYLS
First Trust Tactical High Yield ETF
11/22/2021$0.23$0.2015.00%5.82%11/23/202111/30/2021
FIXD
First Trust TCW Opportunistic Fixed Income ETF
11/22/2021$0.06$0.05509.09%1.36%11/23/202111/30/2021
DGRW
WisdomTree U.S. Quality Dividend Growth Fund
11/22/2021$0.0750$0.065015.38%1.41%11/23/202111/29/2021News Coverage
HRL
Hormel Foods
11/22/2021$0.26$0.24506.12%2.42%1/14/20222/15/2022Upcoming Earnings
PRT
PermRock Royalty Trust
11/22/2021$0.0625$0.053516.82%7.6%11/29/202112/14/2021News Coverage
Positive News
Gap Up
PBT
Permian Basin Royalty Trust
11/22/2021$0.0225$0.02240.45%2.2%11/29/202112/14/2021
CRT
Cross Timbers Royalty Trust
11/22/2021$0.0730$0.06708.96%8.6%11/29/202112/14/2021
FULT
Fulton Financial
11/19/2021$0.08$0.04100.00%11/30/202112/15/2021
VRIG
Invesco Variable Rate Investment Grade ETF
11/19/2021$0.0150$0.01407.14%0.72%11/22/202111/30/2021
How to Invest in Stocks with Increasing Dividends

Dividend stocks have a place in every investor’s portfolio. However, savvy investors know that the secret to success in dividend investing is to identify companies that have a history of increasing their dividend yield over time. Companies that pay dividends are typically mature companies in what are considered defensive stocks (utilities, consumer staples, etc.). These stocks do not generate the same capital growth as high growth stocks so they offer a dividend to help reward shareholders. The best of the best of these stocks are the dividend princes, aristocrats, and kings that have a 10, 25, and 50-year history of increasing their dividend. Dividend investors that do not need the income right away can also take advantage of re-investing dividends as a strategy to help maximize their total return. And for investors who are more comfortable with fund investing, there are a variety of mutual funds and ETFs that are specific to dividend stocks.

Introduction

Income-oriented investors love dividend stocks. These investors love dividend stocks that consistently increase their dividend. As dividend yields go up, it typically causes share prices to increase. This is a win-win for investors as they generate regular dividend income while seeing the value of their shares increase. In this article, we'll take a look at how investors can look for stocks that are increasing their dividends and how to maximize their gain from those investments.

What is a dividend?

A dividend is a monetary payment made to shareholders that comes out of a company’s profit. A dividend is declared and usually pays out quarterly. However, some companies pay a monthly dividend. Still, others pay a single, annual dividend. Investors that are looking for income, as well as reasonable growth, are attracted to dividend stocks.

What companies pay dividends?

Dividends are usually paid by companies who have a slow, steady growth. These companies will not get the same "bang for their buck" by reinvesting in their business. This means to increase shareholder value they will either buy other companies (growth through acquisition) or they will pay dividends – sometimes both.

Why do companies increase dividends?

Companies increase their dividend yield for one of two reasons. The most common reason is that their net profits are increasing. As net profits increase, there is more money to return to shareholders. A second reason is that a company may have a change in strategy. In many cases, a company that is issuing a dividend is still making investments to spur growth and expansion. However, if the company is forecasting an economic slowdown, they may choose to put less money into capital projects. On the opposite end of the spectrum, a rapidly growing company may want to consolidate its capital gains and reassess its market position before continuing its growth strategy. A company may also simply decide to increase its dividend yield to attract more equity investors. In all cases, the choice to increase a dividend means that a company is leaving a larger portion of their profits available to be returned to investors as dividends.

Understanding dividend yield and dividend payout ratio

The dividend yield is the ratio of a company’s annual dividend compared to its share price represented as a percentage. To calculate dividend yield, let’s look at this example:

  • Company A announces a $2 per share annual dividend. The stock costs $40 per share.
  • Company B announces a $1 per share annual dividend. Their stock also costs $40 per share.

To calculate the yield, you would simply divide the announced per share annual dividend by the share price.

  • For company A, that would be 2/40 = 5%
  • For company B, that would be 1/40 = 2.5%

Simply put, investing $10,000 in Company A would produce $500 of annual dividend income. That same $10,000 in Company B would produce $250 in annual dividend income. Assuming all other fundamentals were the same, income-oriented investors would prefer to invest in Company A because of the higher yield.

The dividend payout ratio(also known as simply the payout ratio) gives investors an idea of how much profit a company is returning to shareholders as opposed to how much money they are keeping on hand for reinvestment, to pay off debt, or to hold as cash (i.e. retained earnings). The formula for the dividend payout ratio is as follows:

  • Dividend Payout Ratio = Dividends Paid/Net Income

Some companies will payout 100% of their income to shareholders. An investor should expect a company’s payout ratio to be higher if they are a mature, established company. When a company has a high percentage of retained earnings, it can try the patience of investors.

How to invest in stocks with increasing dividends

Step One: Choose wisely

Once you’ve looked at a company’s dividend yield and dividend payout ratio, it’s still important to choose wisely. Although a dividend is generally considered to be a sign that a company is healthy, that is not always the case. Keep in mind that a dividend is an alternative measure of capital growth. Growth investors would rather invest in companies that are generating impressive revenue and plowing that money back into their business to stimulate even more growth.

A company like Coca-Cola has continued to grow year after year (it’s a favorite of Warren Buffett). Coke’s appeal is in a dividend that is both consistently being issued and is growing every year.

But just because a company has a reputation for offering a dividend, investors should still expect a level of dividend growth. IBM issues a nice dividend of around 4.5% per year. However, the stock has been battered for several years and was showing negative capital growth. So even if investors were reinvesting their dividends, they would not be seeing a large total return from holding that stock.

Also, remember that just because a company announces a dividend does not mean they have to pay it. This is not common, but some companies will announce a dividend, usually with a very attractive yield, to entice investors. But if the company runs into financial difficulty, any dividends are usually the first thing to get cut.

Many companies have a solid track record of raising their dividends. The best of the best have royal titles: princes, aristocrats, and kings.

  • Dividend princes have raised their dividend for at least 10 years.
  • Dividend aristocrats have raised their dividend for at least 25 years.
  • Dividend kings have raised their dividend for at least 50 years.

These companies are very attractive to investors. Any company that has both the desire and the ability to generate increased dividend payments for its shareholders is a stock worth considering for an investor's portfolio. Dividend stocks are regarded as defensive stocks because of their ability to weather the volatility of both bull and bear markets. Put another way, most of these companies are in industries where consumers and businesses will always have a need for their products or services. The ability of these companies to increase their dividend for at least 10 years means that many of these companies have a strong, competitive advantage.

Step Two: Look to reinvest dividends

Many, but not all, dividend-paying companies allow individuals to reinvest dividends through a dividend reinvestment plan (DRIP). Automatic reinvestment is a strategy for investors who do not need regular income that is generated by dividends.

Here’s a simplified example of how a DRIP works. Company XYZ has a share price of $25 per share and a dividend yield of 5%. If an investor buys 100 shares, they will earn a yearly dividend of $125 ($2,500 x 5%). If they choose to reinvest that dividend, at the end of the year they will have purchased an additional five shares of Company XYZ stock and the value of their holdings assuming the share price remained at $25 would be $2,625. It’s a wash, right? But what if the share price climbs to $30 by the end of the year? Assuming the dividend yield does not increase, the payout would be $125, but the 105 shares would now be worth $3,150.

Some companies allow investors to put in additional money (with some minimum and maximum restrictions). An investor will typically pay the market price for those shares, although some companies will sell these shares at a slight discount.

There are two caveats for investors looking to buy additional shares separate from dividends being reinvested. First, is that it can take some time to sell the shares that you buy directly from the company. Second, it is important to remember that every dividend reinvestment represents shares that are being purchased at a different price. This means that the capital gains are going to be different for every transaction. Therefore, when you go to sell these shares all of those capital gains have to be accounted for.

Step Three: Look at dividend mutual funds and ETFs

Investing in a dividend mutual fund or ETF is a good option for beginning investors and investors who don’t want to take the time to choose their own stocks or track individual stocks once they buy them. These funds are typically comprised of multiple dividend-paying stocks. If you believe in the idea of not putting all your eggs in one basket, this may be a great option.

However, choosing a fund can be like walking into a Baskin-Robbins. There are a lot of varieties and it’s still up to you to decide on which funds are right for you. You'll want to look at the stocks that are included and check their dividend yield, their consistency with paying the dividend over time, their expense ratio (low is good) and the size of the company, or market capitalization. From lowest to highest risk, there are large caps, mid-caps, and small caps.

Why do companies cut their dividends?

If dividends are attractive to some investors why do companies cut their dividend? As we mentioned above, a company that is not rapidly growing may take on debt to spur growth. If the company takes on a lot of debt in a short time, the dividend may have to get cut for the company to service the payment of the debt.

Beware of chasing a yield

One trap that can befall dividend investors is chasing high yield. In some cases, a company's dividend yield exists for good reason. But in some cases, the high dividend yield is a warning that the company is not financially stable. That’s why it’s always good to follow the strategy of looking at a company’s fundamentals to understand if their dividend yield and/or payout ratio is sustainable and also looking for companies with a history of increasing yields.

The final work on investing in stocks with increasing dividends

Investing in dividend stocks is a time-honored way of growing wealth slowly. Following the simple three-part strategy of choosing a company wisely, looking to reinvest your dividends, and if necessary investing in dividend mutual funds and ETFs are good ways to identify and take advantage of dividend stocks that are increasing their dividends regularly. Dividend investing is not about chasing the highest yield you can find. There are often reasons why a company is offering a high yield. Like many things in life, if it looks too good to be true, it usually is.


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