Chapter 9

Investing for Income

In This Chapter

arrow Familiarizing yourself with income stock fundamentals

arrow Selecting income stocks with a few criteria in mind

arrow Checking out utilities, REITs, and royalty trusts

Investing for income means investing in stocks that provide you with regular cash payments (dividends). Income stocks may not be known to offer stellar growth potential, but they’re good for a steady infusion of cash. If you have a lower tolerance for risk, or if your investment goal is anything less than long-term, income stocks are a better bet than growth stocks. Long-term, conservative Canadian investors who need income resources can also benefit from income stocks because they have a better track record of keeping pace with inflation (versus fixed-income investments, such as bonds) over the long term.

The bottom line is that we like dividend-paying stocks, and they deserve a spot in a variety of Canadian portfolios. In this chapter, we explain the basics of income stocks, show you how to analyze income stocks with a few handy formulas, and describe several typical income stocks.

Getting your stock portfolio to yield more income is easier than you think. Many investors increase ...

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