Why Dividend Stocks Are Not Boring

There’s a gross misconception that dividend stocks equal boring stocks. Passive income that grows year after year is far from boring. Plenty of cutting-edge companies are established firms with proven business models. Contrary to popular belief, these are often better investments than early-stage companies needing significant debt or share dilution to fund their operations. When you see a company in a high-growth sector paying a dividend, it signals financial stability and resilience.

For instance, in the AI space, companies like Microsoft and Broadcom have been profitable for decades, boast top-tier technology, and pay consistent dividends. Microsoft is up nearly 300% in the past 5 years, and Broadcom has quadrupled in just over one year and a half. Nothing boring about those numbers!

These stocks might dip in a bear market or if AI doesn’t explode as expected, but they would likely fall less than early-stage companies—and their dividends would lessen the sting.

Beyond AI, investors can tap into other hot trends while earning dividends, including some exchange-traded funds and rare companies offering crypto dividends. Biotech is another favourite sector for income. Companies like AbbVie, with a 3.7% yield and doubling stock price over the past 5 years, demonstrate the potential of dividend-paying biopharma firms.

Invest in new technology and exciting trends, but get paid while doing it and minimize risk. The dot-com boom and bust taught that very few of the imploding companies were dividend payers. So, play the hot new trends in the smart way, by buying dividend payers to secure income and capital gains.

Sven Franssen