Income Stock

An equity security that pays regular, often steadily increasing dividends, and offers a high yield that may generate the majority of overall returns. While there is no specific breakpoint for classification, most income stocks have lower levels of volatility than the overall stock market, and offer higher-than-market dividend yields. Income stocks may have limited future growth options, thereby requiring a lower level of ongoing capital investment. The excess cash flow from profits can therefore be directed back toward investors on a regular basis.

Income stocks can come from any industry, but are most commonly found as companies operating within real estate (through real estate investment trusts, or REITs), energy sectors, utilities, natural resources and financial institutions.

Income stocks are sought by conservative investors who still want some exposure to corporate profit growth. They also have steady streams of revenue that allow for a high level of income payout to investors.

The ideal income stock would have a very low volatility (as the Beta would measure), a dividend yield higher than prevailing 10-year treasury bond rates, and a modest level of annual profit growth. Ideal income stocks would also show a history of increasing dividends on a regular basis so as to keep up with inflation, which eats away at future cash payments.


Investment dictionary. . 2012.

Look at other dictionaries:

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  • income stock — Fin [m1]1. common stock sought because of their relatively high yield as opposed to their potential to produce capital growth 2. fixed interest securities acquired for their relatively high yield as opposed to their potential to produce capital… …   The ultimate business dictionary

  • income stock — A stock or share bought primarily for the steady and relatively high income it can be expected to produce. This may be a fixed interest gilt edged security or an ordinary share with a good yield record …   Big dictionary of business and management

  • stock — physical items ( inventory) that a business uses in its production process or has for sale in the ordinary course of doing business. Glossary of Business Terms Ownership of a corporation indicated by shares, which represent a piece of the… …   Financial and business terms

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  • income — money that is being earned by the business. Glossary of Business Terms * * * income in‧come [ˈɪŋkʌm, ˈɪn ] noun 1. [countable, uncountable] money that you earn from your job or that you receive from investments: • The family pays more than 50% of …   Financial and business terms

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  • income share — Class of share within a split capital investment trust that receives a high dividend yield. * * * income share income share ➔ Share * * * income share UK US noun [C] (also income stock) ► FINANCE a share in a company that pays dividends (= part… …   Financial and business terms

  • Income taxes in Canada — constitute the majority of the annual revenues of the Government of Canada, and of the governments of the Provinces of Canada. In the last fiscal year, the government collected roughly three times more personal income taxes than it did corporate… …   Wikipedia

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