How to Choose Dividend Stocks

People look at stocks displayed at the New York Stock Exchange at Wall Street on Feb. 24, 2022 in New York. Angela Weiss/AFP via Getty Images

By Kim Clark From Kiplinger’s Personal Finance

Whatever kind of dividend you’re looking for—high yield, high growth or the holy grail of both—professional dividend investors say to consider these three factors.

Dividend Yield

Yields vary by sector and industry. Real estate, energy and utilities companies generally pay at least 3 percent. Some niches in declining industries, such as tobacco companies, pay out high dividends because they no longer invest much in growth and focus on generating cash for shareholders. Technology and communications firms, as well as companies that provide nonessential consumer goods or services, have low average yields—currently less than 1 percent, according to S&P Dow Jones Indices.