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Income stocks are those stocks that tend to pay higher-than-average dividends over a sustained period. Large, established companies with stable earnings tend to issue them. Utilities and telephone companies are good examples of companies that are considered to have income stocks.
Things To Know
- Income stocks pay higher-than-average dividends.
Who buys them?
Income stocks are popular with investors who want steady income for a long time and who do not need to prioritize large growth in their stocks’ value (though some growth does occur). In this sense, investors who choose them have something in common with bondholders. Income stocks can actually be more profitable than bonds. To try to maximize income, some investors will even seek out companies that frequently raise their dividends and are not saddled with debt.