3 High-Risk, High-Reward Dividend Stocks to Add to Your Watchlist
Dividend investing, often considered a low-risk endeavor, still comes with its own set of risk-versus-reward trade offs. For example, dividend growth is something investors tend to gravitate toward, but it often leads to expensive stock valuations among the companies with the best dividend growth records. That can materially increase the valuation risk of investing in such stocks if you don't go in understanding the trade-offs you're making. On that score, Albemarle (NYSE: ALB), NextEra Energy (NYSE: NEE), and A. O. Smith (NYSE: AOS) are all interesting high-risk, high-reward dividend stocks to consider today.
Albemarle isn't exactly a household name. It produces three main products: catalysts used in energy production (27% of revenue), fire-retardant bromine (29%), and lithium (37%). Lithium is the stuff that gets used in car batteries. The first two are pretty sleepy industries, with annual expected growth in the low-single digits over the next five years. Lithium is expected to be a huge growth opportunity, with industry growth pegged at as much as 20% per year over that same time span. The big catalyst there will be electrification of the transportation sector.
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Source Fool.com
