15.0
32 years
Clorox (NYSE: CLX)
48%
3.5%
15.1
Nordstrom (NYSE: JWN)
39%
3.4%
11.8
12 years
Source: Yahoo! Finance, DividendInvestor.com.
Clearly, these results by themselves don't make solid buy recommendations. Dividend health is just one factor in buying a dividend-paying stock; you also have to be comfortable that the underlying business model is strong and will continue to work in the years to come.
Keep those dividends coming! But it's essential to do your best to stay away from stocks that are going to reduce their dividends. In such situations, you lose twice: You not only suffer the direct loss of income from the dividend reduction, but you also typically see share prices plummet as concerns about the health of the company arise.
So, as you search out great income-producing stocks, make sure you consider the possibility that a company may reduce or eliminate its dividend in the future. By being aware of warning signs and staying on top of the stocks you pick, you can steer clear of potential landmines and keep your money out of harm's way.
For more finding the right dividend stocks, read about:
Dan Caplinger is a contract writer for The Motley Fool.
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