Income Stock

There are two basic ways to make money investing in stocks. One is capital appreciation....good ol’ buy low, sell high. It’s the stereotypical stock market action, with traders guzzling Red Bull and frantically working their stress balls.

The other way to make money comes from dividends. Those are payments companies make to their shareholders.

Money from the capital appreciation comes from your stocks increasing in value. You sell the shares for more cash than you paid to buy them, allowing you to keep the profit.

Income stocks represent those aimed more at accumulating dividends. You don’t really care if the share price goes up. You’re just in them for the quarterly dividend checks sent from the company.

As such, when seeking out income stocks, investors look for high dividend rates and low volatility. The shares often come from old-line companies with steady income and predictable businesses. Utilities represent the stereotypical type of company that has income stocks.