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8 Ways to Profit From Dividend Stocks


Lately it's been hard to go wrong with dividend-paying stocks. Many companies are being generous with their payouts, and their stocks have generally performed well. But if your dividend holdings look a lot like your Grandma's—perhaps a smattering of utility and consumer-staples stocks—it's time to update your strategy.

One reason to revamp your approach: Some of the more traditional dividend-paying sectors, such as utilities and telecom services, may fare poorly when interest rates rise. What's more, income-starved investors have been snapping up higher-yielding stocks, leaving many of these shares looking pricey. And investors who limit their dividend hunt to the usual suspects are overlooking some companies with great dividend-growth potential. Some stocks that Grandma never dreamed of buying—including many technology companies—have become reliable dividend payers.

Here are eight ways income investors can profit from dividend stocks.

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