You are a financial advisor whose client wants stock that pays regular dividends. Which of the following do you advise the client to buy?

Question

growth stock

income stock

common stock

preferred stock

Answer 1

For a client interested in stocks that pay regular dividends, I would advise them to consider income stock and preferred stock.

1. Income Stocks: These are typically established companies that provide reliable dividends to their shareholders. They are a great option for investors looking for income through dividends.

2. Preferred Stocks: These stocks generally pay fixed dividends and have priority over common stocks when it comes to dividend payments. They are often less volatile than common stocks and can be an appealing choice for regular income.

While common stocks can also pay dividends, they tend to be more variable and are not primarily focused on regular income, and growth stocks typically reinvest earnings back into the company rather than paying dividends.

Therefore, I would recommend focusing on income stocks and preferred stocks for regular dividend payments.