Return to course: Dividend Growth Investing Course – Building Wealth Through Steady Income
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Quiz: Mistakes
What of the following is a common mistake when evaluating dividend stocks?
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Taking starting dividend yield into account
Evaluating debt levels
Focusing on just dividend metrics
Focusing on valuation
What can a high dividend yield sometimes indicate?
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Low debt load
Overvaluation
Financial difficulties
High level of stock buybacks
Which factors often lead to dividend cuts?
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Declining earnings
Overvaluation of the stock
Increasing debt load
Stock splits
What is the downside of low-yield/high-growth dividend stocks?
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Too much debt
Unstable ROIC
Financial difficulties from exponential growth
Smaller compounding effect from re-investment of dividends
What should investors AVOID when investing in dividend stocks?
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Diversifying across multiple stock market sectors
Investing in undervalued stocks
Reacting to short-term market volatility
Re-investing their dividends
Which factor can leave a portfolio vulnerable to sector- and company-specific issues?
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Focusing on high dividend growth
Heavily concentrated portfolio
Using a DRIP
4%+ starting yield