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Income Stocks

Income stocks have high dividend payouts, and the companies are typically in the mature stages of their industry life cycles. Stocks of companies that have established a pattern of paying higher-than-average dividends can be defined as income stocks.

Additional Comments:

Income stocks tend not to appreciate in price as much as blue-chip stocks do because income stock companies are more mature and are not growing as quickly as are blue-chip companies. This statement does not mean that income stock companies are not profitable or are about to go out of business. On the contrary, they have stable earnings and cash flow, but they choose to pay out much higher ratios of their earnings in dividends than other companies do. Utility companies and real estate investment trusts (REITs) are examples of income stocks.

Related Terms:

Blue-Chip Stocks
Blue-chip stocks refer to companies with a long history of sustained earnings and dividend payments. These ...

Growth Stocks
Growth stocks are issued by companies expected to have sustained high rates of growth in sales ...

Value Stocks
Value stocks are stocks that have lower prices relative to their fundamental values (growth in sales ...

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