Dividend stocks can provide a great foundation for an investment portfolio.
But plunking your hard-earned cash into the share with the highest yield could be a costly mistake.
At the moment, nearly a third of stocks listed on the Nairobi Securities Exchange sport dividend yields greater than 4%. But how do you decide which ones stand the best chance of building your wealth over the long-term?
Beware High Debt Loads
After identifying a stock with a high yield, the first thing you want to check is its debt load. Companies that borrow heavily often find it difficult to sustain their dividend when the economy turns sour and interest rates rise.
Read more: Kenya’s Three Top Dividend Stocks