High-quality dividend stocks are like a fine wine: Over time, they just get better and better.
The problem is, finding high-quality dividend stocks isn’t easy. That’s because yield and risk tend to be correlated. In other words, the higher the yield investors will receive, the higher the likelihood of losing money and/or running into a yield trap — i.e., a situation where an artificially high yield lures investors into a struggling business. Since yield is a function of payout relative to share price, a failing business model with a plunging share price could present with a skyrocketing yield and trick unsuspecting income investors.
That’s the bad news when it comes to high-yield dividend stocks. The good news is… Continue reading at Fool.com