I have always found high dividend yielding stocks to be attractive as long as the company has the balance sheet and cash flow to support that dividend, but this week’s Federal Reserve decision makes them more attractive than ever. Why is this the case? Let’s look at the alternatives you have right now. Certificates of Deposit as well as Money Market Savings Accounts are both going to be yielding extremely low amounts in the coming months as the prime rate will be so low that banks simply cannot afford to offer an attractive yield. Treasury bonds are as safe as can be, but they have recently been trading at around 0, which obviously is simply a safety trade and won’t net you any money.

Which high dividend yielding stocks should you avoid? Avoid high dividend yielding stocks that are yielding such a high amount primarily because their stock price has fallen so drastically. Also, avoid dividend paying stocks that are losing money and/or trying find ways to raise new capital for their operations. If a company is needing to raise money to stay in existence do you really think their dividend is safe?

Companies with a solid balance sheet and strong free cash flow are your best friend when it comes to high dividend yields. I also find consistency to be a tremendous key to showing the strength of their business. There are some companies who have raised their dividend payouts consistently for over 40 years straight. These are the types of companies that should help investors in the long run.

A high dividend yielding stock isn’t necessarily immune to the markets volatility, but it does have a nice cushion to it because of the safety net of the cash on hand and the dividend payout. The bottom line here is that the best dividend paying stocks are going to be a very valuable asset that earns more than any savings account or certificate of deposit will, and if the company is solid through economic pressures you also have the opportunity for price appreciation. Consider high dividend yielding stocks in lieu of other investments that are less attractive with interest rates at zero.