Dividend investing can be a very powerful tool to use in becoming profitable in the stock market. There are many different companies out there that have steadily increased their dividends over 25 years. A select few dividend stocks have even done it for more than 50 years. Investing geared towards dividends can also help weather the storm in bear market times, where you are still able to have some source of steady income within a choppy market.
Paying attention to a company’s overall financial health and outlook on dividend yield is very important. If you are trying to make some money in dividends from a stock that is a sinking ship. It’s just a recipe for disaster. Compare dividend yields for companies within the same sector to determine if one company is paying huge dividends to shareholders instead of reinvesting that capital back into the business to help it grow. Below I will discuss three dividends stocks, two are very safe options for dividend investing and the third one is a riskier option.
NextEra Energy (NEE)
NextEra Energy (NYSE:NEE) generates and sells electricity to consumers on a residential and commercial scale. They generate power through various forms such as solar, nuclear, coal and natural gas. One of the company’s subsidiaries is Florida Power & Light, another Florida-based utility company. And they also operate a renewable energy segment of their business. The company has seen 30 consecutive years of dividend increases, and they just recently announced another dividend increase to 47 cents per share.
In April, NextEra released its first quarter earnings with revenue that grew 132% year-over-year. The jump in revenue is because the company has been expanding its renewable energy business. NextEra Energy, as a whole, is a well-established energy company that profited heavily during the much higher energy prices over the last couple of years. But, with the energy market now in a slump, NextEra is trading lower compared to the previous year, making it an interesting buying opportunity, especially with the predictable dividend increases in the future.
Realty Income (O)
Realty Income (NYSE:O) is a real estate investment trust () located in San Diego, California. It is a member of the S&P 500 Dividend Aristocrats Index, which is a comprised of companies that have increased dividends for at least 25 consecutive years.
The company owns and operates over 12,000 real estate properties, typically under long-term net lease agreements. One of the advantages when it comes to REITs regarding dividends is that these companies must pay at least 90% of their taxable income to shareholders in the form of dividend payments every year, which makes them a really appealing option for dividend growth.
The company’s net income for the first quarter grew by 13% compared to the previous year. They also recently announced their 121st dividend increase, which is now 26 cents per share, payable on July 14. With solid dividend growth and being a real estate company that is heavily diversified, this stock is a must for any dividend investor.
ASE Technology Holding (ASX)
ASE Technology Holding (NYSE:ASX) provides services for semiconductor production, such as packaging, testing and manufacturing. From earnings they released in the first quarter, they stated a 9% decline in revenue and an EPS drop of 56% compared to last year. The company profits are heavily based on just a few large customers, which can lead to somewhat unpredictable returns.
ASE Technology offers a dividend of 57 cents per share. This company is heavily influenced by the overall semiconductor market, which has been very profitable over the last few years, but with possible regulatory snags in the future regarding the industry. ASX has a good dividend that has increased for three years, but they are more of a risky option in terms of dividend-paying stocks with a high potential upside.
On the date of publication, Noah Bolton had a long position in ASX. Noah Bolton did not have (either directly or indirectly) any other positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.