The stocks that generate regular and steady income in the form of stable and increasing dividends are called income stocks. They, in most cases, belong to well-established companies and demonstrate low levels of volatility. Such companies generate stable revenues and create substantial shareholder value.
Income stocks belong to low-risk low-reward profile. They form a part of the fixed-income portfolios of investors and become steady sources of short-term dividends for them. However, income stocks do not generate high long-term returns. They are exact opposites of growth stocks that follow the high-risk high-reward profile.
|ADP||Automatic Data Processing, Inc.||$226.19||11.98%||93.9B|
|CAH||Cardinal Health, Inc.||$66.68||33.33%||18.2B|
|CINF||Cincinnati Financial Corp.||$89.57||-21.97%||14.3B|
|CLX||The Clorox Co.||$128.39||-21.96%||15.8B|
|ED||Consolidated Edison, Inc.||$85.76||19.78%||30.4B|
|EMR||Emerson Electric Co.||$73.22||-23.06%||43.3B|
|FRT||Federal Realty Investment Trust||$90.12||-25.55%||7.3B|
|GD||General Dynamics Corp.||$212.17||7.04%||58.2B|
|JNJ||Johnson & Johnson||$163.36||1.80%||429.5B|
|KO||The Coca-Cola Co.||$56.02||5.66%||242.3B|
|LOW||Lowe's Cos., Inc.||$187.81||-7.80%||116.6B|
|MKC||McCormick & Co., Inc.||$71.27||-11.70%||19.1B|
|PG||Procter & Gamble Co.||$126.25||-9.55%||301.2B|
|SPGI||S&P Global, Inc.||$305.35||-28.72%||101.8B|
|SWK||Stanley Black & Decker, Inc.||$75.21||-56.99%||11.1B|
|WBA||Walgreens Boots Alliance, Inc.||$31.40||-32.91%||27.1B|
|XOM||Exxon Mobil Corp.||$87.31||43.30%||363.9B|
|PBI||Pitney Bowes Inc||$2.33||-69.06%||405.1M|
|TUP||Tupperware Brands Corp||$6.55||-69.69%||291.2M|
|USAC||USA Compression Partners LP||$17.40||5.26%||1.7B|
|CC||The Chemours Co||$24.65||-17.61%||3.8B|
|HWC||Hancock Whitney Corp||$45.81||-5.08%||3.9B|
|EQH||AXA Equitable Holdings Inc||$26.35||-12.81%||9.9B|
|CNO||CNO Financial Group Inc||$17.97||-25.74%||2.1B|
|V||Visa Inc Class A||$177.65||-22.92%||367.5B|
|CMCSA||Comcast Corp Class A||$29.33||-48.73%||129.4B|
|COST||Costco Wholesale Corp||$472.27||5.34%||209.1B|
|TXN||Texas Instruments Inc||$154.78||-20.13%||141.4B|
|UNP||Union Pacific Corp||$194.82||-3.43%||121.7B|
|NEE||NextEra Energy Inc||$78.41||-1.01%||154.1B|
|LMT||Lockheed Martin Corp||$386.29||11.07%||102.4B|
|TJX||TJX Companies Inc||$62.12||-6.74%||72.1B|
Factors to Consider Before Investing in Income Stocks
The primary objective of investors investing in income stocks is regular and steadily increasing dividend income. Therefore, investors must consider the dividend yield of income stocks. However, investors must also take a look at the payout ratio compared to the earnings.
If the dividend yield and payout ratio are too high, the company may not have enough retained earnings to sustain and grow its earnings per share over time.
Additionally, investors must also consider the overall health and strength of the companies. They must perform a thorough fundamental analysis to determine the revenue and earnings growth, efficiency of the management team, and other factors.
Which Income Stocks Should I Buy?
Among a large number of income stocks, we have generated a list of the best income stocks for investors to select from. Income stocks must belong to stable, time-tested companies, with the potential of creating a robust income-generating portfolio.
Income stocks are generally known for good short-term gains. However, if chosen correctly, many income stocks also have the capability to double their dividend payouts in the years to come and thus generate high long-term returns as well.