If you are a dyed-in-the-wool dividend investor, then you probably love to see a stock with a big yield. In fact, high-yield dividend stocks probably draw you like a moth to a flame. That's not a problem if you approach dividend investing with the proper care. If you don't, however, you might end up burned. Here are seven key facts to consider as you look at high-yield dividend stocks.
Dividends are great, representing a tangible return of value to shareholders. But there's a lot of information content in a dividend -- companies know dividend hikes are viewed as a sign of strength, while dividend cuts are not something Wall Street likes to see. So a company with a long history of increasing its dividends has been making a statement about its financial strength, and every new increase suggests that management sees a bright future ahead.
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