First, you should recognize that the best dividend stocks are not always the best stocks to build a stable portfolio. And second, you should recognize that good dividend stocks are sometimes more expensive than equivalent stocks that don’t pay great dividends. But for certain financial reasons, dividend stocks are a very good choice.

The main financial reason is to create an income that you don’t have to worry about too much. If you are interested in creating a cash-generating portfolio that carries good value, you should look for dividend stocks. Before doing this, you should visit a financial planner to find out what the consequences of this will be on your taxes.

If this is one of your reasons for buying stocks, your best dividend stocks will come from established companies who don’t carry much debt. Blue chips are the best dividend stocks, of course; they’ve got the best credit ratings, they own most of their property and equipment already, and they’re going to be around for the long haul. You should also look at stocks from companies that own their land and buildings, even if they’re relatively new. Companies that have recently merged with other companies can sometimes generate more revenue than you would expect.

Once you’ve located several prospects, look at their annual reports. Real dividends are always reported there, and you can determine how lucrative their stocks are by looking back about five years at earnings. There are several websites that also track the best dividend stocks, but if you find your stocks on these sites, do your homework. Check the annual reports yourself, and compare reports from several sites before selecting the dividend stocks you’re going to buy.