Oftentimes, high dividend paying stocks are some of the best of that bunch. You also increase your chances of stumbling upon a market superstar-a stock that does two to three or more times better than the market average. However, you’ll still want to make sure your portfolio is well-diversified across most if not all of the sectors.īy diversifying across most if not all of the five sectors, you avoid overloading yourself with stocks that are about to slump simply because of industry conditions or investor fashion. That’s because these firms generally pay high, secure dividends, and have long histories of raising their payments, even during downturns. The proportion of your holdings you devote to each sector depends on your temperament and financial goals.įor example, if you’re an income investor, you may wish to place more emphasis on Utilities and Canadian banks. We continue to recommend that you spread your investments out across most if not all of the five main economic sectors (Manufacturing & Industry Resources Consumer Finance and Utilities).

Utilities and Canadian Finance are some of the best stocks with high dividend yield By continually rewarding investors, and retaining enough cash to finance their businesses, they also provide an attractive mix of safety, income and growth.Ī track record of dividend payments is a strong sign of reliability and an indication that investing in the stock will be profitable for you in the future. Generally, these firms leave themselves enough room to handle periods of earnings volatility. In short, high dividend paying stocks can come with pitfalls.ĭividend cuts will always undermine investor confidence, and can quickly push down a company’s stock price.Ībove all, for a true measure of stability, focus on stocks with a high dividend yield that has been maintained or raised during economic or stock-market downturns. That’s because a high yield may signal danger rather than a bargain if it reflects widespread investor skepticism that a company can keep paying its current dividend. When looking for high dividend paying stocks, those with high dividend yields, you should avoid the temptation of seeking out stocks with the highest yields-simply because they have above-average yields.

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