When a company makes money, it may occasionally distribute a portion of that profit to its shareholders in the form of cash dividends.
Someone who invests in stocks of companies that provide high dividends is known as a dividend investor.
The goal of a successful dividend investor is to build a portfolio of the stocks with the highest dividend yields.
Stocks that pay high dividends provide passive income
Look for a dividend payout ratio between 60% and 70%, which may show that the company is saving some money for growth.
When the debt-to-equity ratio is higher than 1, it indicates that the company has at least $1 in net value for every dollar debt.