Let's face it: The market has been tough for everyone. Experts still expect slow economic growth and no clear indication of rate cuts. With the high inflationary environment, the overall theme has been on defensive strategies. This has raised the attractiveness of income investing through dividend stocks. This makes buying stocks with the highest dividend yields very attractive. However, extremely high-yielding stocks are often unsustainable and may have highly questionable financial conditions foursome companies.
Even though high yields are important, we must remember that company quality is equally important. When looking for dividend companies to invest in, investors can look at the company’s dividend history as a measure of quality. Companies with an outstanding history of dividend growth are likely to continue growing their dividends moving forward. This is why most dividend investors focus on groups of stocks with a history of dividend increases.
