Learn How to Pick Sustainable High-Dividend Stocks

Investors looking for dividend stocks should consider two critical measures: the Dividend Yield and the Dividend Payout Ratio.

The Dividend Yield is the simple rate of return for shareholders in the form of cash dividends, while the Dividend Payout Ratio indicates the portion of a company's net earnings paid out as dividends.

The Dividend Yield is the most widespread measure, but many experts think that the Dividend Payout Ratio better indicates a company's ability to distribute dividends in the future consistently.

A higher ratio may indicate lower dividend sustainability, despite a higher yield.

The ratio is closely tied to a company's cash flow.

It is recommended that investors evaluate both measures when making investment decisions.

In today’s market in Qatar, stocks yielding a dividend above 5% with a payout ratio below 60% are generally considered high-quality, sustainable dividend stocks.

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