"Investors love dividend stocks, especially those with ultra-high yields, because they provide a substantial passive income stream and offer significant total return potential. Total return includes interest, capital gains, dividends, and distributions realized over time. In other words, the total return on an investment or a portfolio consists of income and stock appreciation. Passive income is revenue generated without the earner's continuous active effort. This makes it a desirable financial strategy for those seeking to diversify their income streams or achieve financial independence."
"According to the Internal Revenue Service (IRS), passive income generally includes earnings from rental activity or any trade, business, or investment in which the individual does not materially participate. It can also include income from limited partnerships, stocks, bonds, and other similar enterprises in which the investor is not actively involved. The more passive income that can help cover rising costs-such as mortgages, insurance, taxes, and other expenses-the easier it is for investors to set aside money for future needs as they prepare for retirement."
Ultra-high-yield dividend stocks can deliver substantial passive income and contribute materially to total return through dividends, interest, and capital gains. Passive income includes earnings from activities in which the investor does not materially participate, such as rental activity, limited partnerships, stocks, and bonds. Dependable, recurring dividends, particularly monthly payments, help cover living costs like mortgages, insurance, and taxes while enabling investors to save for future retirement needs. Combining high-yield names with conservative blue-chip dividend giants creates a barbell approach that balances yield generation with stability. Select ultra-high-yield names may be on sale and receive Buy ratings from major Wall Street firms.
Read at 24/7 Wall St.
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