High-yield dividend stocks have generated a lot of interest lately, but Craig at Sage Rutty explains a common misconception about what that yield actually means. A dividend payment does not add value, it transfers value from the share price into cash in your hand, so a stock's total return is not automatically better just because it pays a dividend. He contrasts this with bonds, where a higher yield genuinely adds to your return, and explains what a dividend can and cannot tell you about a company.
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