10 Things Every Dividend Investor Should Know

2. Investors Should Pay Attention to Company Fundamentals:

When investing in dividend stocks, analysts recommend considering the respective company’s fundamentals and overall financial health. For this reason, investors should focus on companies that maintain and grow their dividends over time as these companies have strong balance sheets and solid fundamentals. Charles Schwab reported that over the past 40 years that ended in 2020, stocks that grew or initiated dividends delivered an annual average return of 13.74%, compared with a 10.3% return of companies that cut their dividends. During this period, stocks that did not pay dividends returned 9.60%.