Income Stocks

An income stock usually pays regular dividends to its shareholders.

An income stock usually pays regular dividends to its shareholders. Income stocks tend to be well-established companies with strong financial performance. These companies are usually found in mature industries, for example, the utility industry. As a result, income stocks are less volatile, on average, than the overall stock market and tend to offer steady dividends.

Compared with growth stocks, companies issuing income stocks are less likely to reinvest their earnings into research and development, thus generating high dividend yield. On the other hand, companies issuing income stocks have fewer chances to expand and grow at a fast pace.

  • See below for a brief comparison of income stock and growth stock.

Next step: Learn how to choose stocks by using Screeners.

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Lesson List
1
Making a First-Time Investment
2
What is a Stock?
3
Exchange
4
Stock Indices
Income Stocks
6
Growth Stocks
7
Value Stocks
8
The Over-the-counter (OTC) Market