For retirees, dividend stocks can offer the best of both worlds. The most obvious is a steady income stream, one that often increases over time. The other is the potential for capital appreciation, which is important to fight off the effects of inflation during retirement.
But picking dividend stocks isn’t as easy as buying the ones that pay the highest yields. In fact, stocks with extremely high yields are often in financial distress, with dividend cuts right around the corner. The key is to invest in stable, well-managed companies with consistent and predictable cash flows.
