If you want to own a consistent income-producing machine in your portfolio, you need to focus on stocks with healthy balance sheets, strong cash flows, and a commitment to dividend sustainability.
Anything other than that, and you risk inconsistent distributions or even dividend cuts if you take yield chasing too far
Those factors are as important now as they have been at any point since 2022. That was the last time high inflation and high interest rates beat up tech, growth, and low-quality stocks. It was the durable, defensive stocks that held up well and even generated gains in some cases.
The market’s focus is still on tech and artificial intelligence (AI) stocks, but long-term-oriented portfolios are benefiting from smart dividend-income strategies. If you don’t want to go through the hassle of picking individual winners, a number of exchange-traded funds (ETFs) do the work for you and do it well. They target stocks that demonstrate long-term dividend growth, balance sheet quality, and high yield.