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11 Higher Yielding, Lower Risk Stocks To Perk Up Your Dividend Income

 June 22, 2011 11:50 AM

As a society we have grown accustom to wanting it all, including our investments. Specifically, many income investors want both high yield and low risk. A dividend stock with a high yield doesn't mean much if the dividend is cut or eliminated, and the stock price declines significantly.  So can an investor find both higher yields and lower risks?

If your goal is to accumulate wealth for a comfortable retirement, then there is no risk-free path. Throughout time every angle has been tried and failed. Inherently, individual stocks will carry higher risk due to the lack of diversification when evaluated on a stand-alone basis.

Sometimes it is desirable to accept higher risk for a higher yield. Other times we may be accepting higher risk and are not being adequately compensated for the additional risk.

You can mitigate some of this risk by selecting solid dividend paying companies with a track record of increasing their dividends each year. Consider this list of higher-yielding (3.75% or greater), lower-risk (1-3 with one being the lowest risk) dividend stocks:

Diebold, Inc. (DBD)
Yield: 3.8% | Risk #: 1.25
Diebold, Inc. develops, makes, and services self-service transaction systems, electronic & physical security systems, and software used to equip bank facilities, voting terminals.

Middlesex Water Co. (MSEX)
Yield: 3.9% | Risk #: 1.25
Middlesex Water Co. primarily provides regulated water utility service in parts of New Jersey and Delaware, as well as operates wastewater systems and conducts municipal contract operations.

Nextera Energy, Inc. (NEE)
Yield: 3.9% | Risk #: 1.25
Nextera Energy, Inc.

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