Should You Buy the 3 Highest-Paying Dividend Stocks in the S&P 500?
High dividend yields can signal either financial strength or serious trouble. Here's what you need to know about today's top S&P 500 dividend payers.
Dividends can be tricky.
Sometimes, a generous dividend yield comes from a thriving company eager to share its surplus cash profits with shareholders. I'm talking about dividend policies fully funded by the company's free cash flows, typically increasing by a few percent every year. This is a robust cash machine at work, and a powerful income generator for patient investors.
Other times, high yields indicate a business in deep trouble. It could be a temporary situation, with stock prices diving for short-lived or fixable reasons. Stocks in this category could be great long-term investments, as new money can lock in a low starting price and high effective dividend yield.
