Balancing Risk and Growth When Looking for Basic Materials Dividend Stocks

Basic materials are hot right now. With oil prices rising past $110 a barrel, copper setting all time highs, and steel close to its 2008 peaks, many investors are scouring the markets for good investment opportunities. Some investors look at basic materials as good dividend stocks - strong consistent dividends; however, it can often result in simply chasing the highest yield.One can always ask the questions, 'is this a high dividend yield because it has strong earnings and good prospects or is it a high yield because the price is in decline due to fundamental questions about the company'. Finding a 5% dividend yield only to have the stock drop 10% in price is not very useful. When looking at investment opportunities it is important to dig a little deeper to understand the company's growth prospects and risk profile. However, for those interested in simply chasing yields here are... Read more