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Dividends: You Have to Earn Them First

Aaron Levitt Jun 05, 2016

As dividend investors, we love a fat, juicy yield. There’s nothing like getting a check in the mail ‒ or in your brokerage account ‒for doing absolutely nothing. It’s what dividend investing is all about.

Sure, we all know something yielding 10%+ has plenty of risk behind that payout. But what about stock that is yielding only 3%? Or 2%? Well, if current data is correct, there’s plenty of risk behind those smaller dividend yields too.

The danger and risk comes down one unpretentious thing: earnings. And earnings haven’t been great for many stocks in recent quarters.
It’s a huge problem for dividend investors.

But it doesn’t have to be, if you understand a very easy-to-use metric.

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