It is the dream of most people to retire early. That is why some start saving as soon as they can, others look into different investment opportunities and other retirement packages.

Dividends income can help you retire early if you can go about it the right way. This article will give you the needed information to get started and take fully advantage of dividends income. Look out for the following points.

• What Are Dividends Income
• How to Retire Early And Live Off Dividends
• How Much Money do You Need to Invest to Live Off Dividends
• Are Dividends a Good Source of Income?
• Dividends Retirement Calculator
• Can Dividends Stocks Beat Bonds For Early Retirement
• What Stocks Pay a Dividend Every Month
• Which Mutual Funds Gives Highest Monthly Dividend
• Highest Paying Dividend Stocks
• Is it Better to Reinvest Dividends or Take Cash
• What Are The Top 20 Dividends Stocks
• Which Stock is Best to Buy Right Now

What Are Dividends Income

Distribution of earnings to shareholders that may be in the form of cash, stock, or property. Mutual fund dividends are paid out of income, usually on a quarterly basis, from interest generated by a fund’s investments. Also known as a dividend distribution.

In other words, it is the dividends paid to shareholders in a publicly-traded company or mutual fund. Various factors, notably how long one has held the shares and whether one reinvests the dividend, determine whether dividend income is taxed as ordinary income or capital gains, or not taxed until one sells the shares.

How to Retire Early And Live Off Dividends

No matter how much money you save for retirement, you’ll always worry that it isn’t enough. With the market as it currently is, chances are you won’t be able to live off the interest on your investments. But you can potentially live off your investment dividends.

The key is to carefully research each investment you’re considering and use tools like stock dilution calculators to ensure stocks with high-paying dividends aren’t losing their value.

One option is to invest in dividend-paying stocks, then live off the dividends either wholly or as a supplement to any other retirement income you’re getting.

Companies have three options when they make a profit on their stocks. They can:

• Reinvest the earnings into the business.
• Buy back stock.
• Pay dividends to shareholders.

The key is to find stocks that regularly issue dividend payouts to their shareholders.

Compounding of Dividend Income

Your best bet if you want to live off dividend income in retirement is to get started as early as possible. In this scenario, you’re relying on the compounding of the dividends you’re earning between now and the day you leave the workforce.

If you have a dividend-yielding stock that earns 3 percent, and you have $100,000 invested in that stock, a 3 percent dividend yield on that stock would give you $3,000 in dividends.

Even better, over time, the company may decide to increase the dividends it pays. Even if that amount stays the same, though, you’ll be earning 3 percent on the money you originally put in, plus your new earnings. If you have enough time to build it, this compounding gives you a nice cushion for your retirement.

Finding Dividend-Paying Stocks

A quick web search will connect you with numerous lists of dividend-paying stocks, but it’s important to look at the dividend yield, as well. NASDAQ maintains a list of dividend stocks, along with current dividend yield, current price, indicated annual dividend, ex-dividend date and pay date.

On a list like this, one of the most important factors is the indicated annual dividend, which shows you the amount a stock pays out each year in dividends, expressed as a percentage of its current share price. With the ex-dividend date, you’ll see the date at which you can qualify for the payout, and the pay date lists the next date a dividend payment is expected to be made.

Dividends and Share Dilutions

Equity dilution is an important concern for many investors who put their money behind a dividend-paying stock. As with a stock split, a dividend boosts the number of outstanding shares, which means the per-share price automatically drops. This happens because stock prices are determined by dividing the value of the company holding the stock by the number of shares.

It’s important to monitor the value of your stock if the company regularly pays out dividends. A stock dilution calculator can help you determine how each move will dilute your stock, provided you have all the other information. If you begin to notice that the value of your stock is dropping too much, it may be worth considering making a change.

Monitoring Share Dilution

If you’re concerned about dilution affecting your investment, you can also simply keep an eye on the market. Over the course of six months to a year, you can see how your stock is charting. Although there are many factors that can generate sudden spikes, a dilution is often the root cause.

Before you can run the numbers through a stock dilution calculator or monitor the charts, though, it’s important that you fully understand how dilution is calculated. A company’s common shares include authorized shares, outstanding shares, restricted shares and float. Outstanding shares are affected by dividend payouts since there are now more outstanding shares floating around out there.

Dividends Increasing Shares

For you as an investor, though, the dividend payout actually increases the number of shares you have in the company. If you own 10,000 shares and the business behind those shares declares a dividend of 0.2, you would then own 12,000 shares since you’ll get 0.2 of a share for every share you own.

Still, this may not help you once you’re living off dividends, especially if it knocks the price down. You may own more shares of a particular stock after the dividend payout, but if the price has dropped significantly, it won’t work out to more money. You may even lose money on the deal, temporarily, at least. That in itself makes living solely off dividends challenging.

Receiving Dividends as a Shareholder

If you’ve invested in a stock that you’ve discovered frequently pays dividends, you may wonder what to expect when that first payout comes. As a shareholder, you have three options once the dividend has officially been issued:

• Take the money and live on it.
• Reinvest the money into the same stock.
• Reinvest the money elsewhere.

Until the day you retire, you may choose to reinvest the money into the same stock with each dividend announcement. If enough people reinvest their dividends back into the same stock, you won’t have to worry about equity dilution, which is why it can be so unpredictable

How Much Money do You Need to Invest to Live Off Dividends

Many companies pay dividends, but the dividend yield can vary greatly from company-to-company, and some companies pay no dividends at all.

One thing you will notice when you start researching dividend-paying stocks is that the yield is usually relatively low. Companies are forced to decide whether to re-invest profits into their business or to give it to stock owners.

Usually companies have a mixed approach and both re-invest and give stock owners profits in the form of a dividend, with a majority of profits being re-invested in the business.

One thing you may have noticed is that it will take a lot of money to create an income you can live off of solely from dividends. It’s important to remember that companies are always trying to increase their income, and in turn, their stock price.

Instead of being discouraged by the amount of money needed to live off of dividends, use it as motivation to save more of your income and to increase your income.

If your goal is to live off of dividend income, the best thing you can do is increase your income. That extra income can then be diverted towards dividend-paying stocks or mutual funds. You can do this at your 9-5 job or by increasing side hustle income.

Your ability to increase your income at your 9-5 will depend on a number of things that you may or may not have control over: your specific job, the demand for your skills, the economy, and a number of other factors.

Making an extra $5,000 or $10,000 at your 9-5 job can be a lot easier than making an extra $5,000 or $10,000 through a side hustle. For example, you may get a promotion that nets you an extra $5,000 a year.

In your new role, you may have more responsibilities but you may work the same number of hours. A side hustle, on the other hand, typically requires you using your free time to work.

Are Dividends a Good Source of Income?

There are more advantages to dividend investing than you might think. In addition to producing a stream of income, dividend-paying investments can be less vulnerable to rising interest rates than some other income investments. Plus, dividend payments have the potential to rise as company earnings grow, while interest payments from most investments remain static.

If you don’t need the dividend income to support your current lifestyle, you can reinvest the dividends, also known as systematic investing. By participating in a dividend reinvestment program, you can help enhance your portfolio’s growth potential by using your dividend income to purchase more shares in the company.

By accumulating additional shares, you can increase the potential for more dividend income over time. Remember, though, that systematic investing does not ensure a profit or protect against loss.

Dividend-paying stocks can also help reduce the overall volatility of your equity portfolio. Although past performance is not a guarantee of future results, price moves of these stocks historically have been less than those of non-dividend-paying equities. Because of their income potential, investors are less likely to sell these stocks in turbulent markets, which can temper price swings.

There’s also an income tax advantage. Dividends from Canadian corporations are eligible for the dividend tax credit, which reduces the tax you pay on income from these shares. Interest income, on the other hand, is fully taxable.

And if shares increase in value there are also capital gains, which receive preferential tax treatment. For more information, please consult your tax professional.

How do you pick suitable dividend-paying stocks? Consider investing in companies that are capable of generating an uninterrupted stream of dividends, perhaps with the potential of increases down the road. Here are some possibilities to consider:

• Large, blue chip companies with good cash flow and profit histories
• Companies that have a solid record of paying uninterrupted dividends
• Companies that have consistently raised their dividends

However, never invest in a company simply because it offers a good dividend. The longevity of that dividend and the health of the share price can depend upon whether the business is sound and has good prospects for the future.

Dividends Retirement Calculator

Use this retirement income calculator to determine how much monthly income retirement savings may provide during retirement. The annual savings, expected rate of return and current age all have an impact on the monthly retirement income. View the full report to see a year-by-year breakdown of retirement savings.

Can Dividends Stocks Beat Bonds For Early Retirement

Stocks can be a good option to boost investment returns for retirees amid dwindling bond yields, according to this article in The Wall Street Journal.

Retirees may use the money withdrawn from their portfolio to invest in stocks for their dividends. “If you put together a portfolio of good blue chips, you might start with a yield of 3%” noted one expert in the article.

But you have to “train your brain to ignore the price movement,” he says. “You want to focus on the income production and the growth of that income.”–The Wall Street Journal

What Stocks Pay a Dividend Every Month

Realty Income Corp.

Realty Income is a well-known monthly dividend stock, as its corporate slogan explicitly labels this firm as “the monthly dividend company.” That’s not just marketing, either, with an impressive streak of roughly 600 consecutive monthly dividends under its belt.

A leading real estate company, this stock funds its consistent payouts through long-term leases of its commercial properties. Realty Income’s top tenants right now include national drug stores, familiar convenience stores and physical fitness facilities.

Current yield: 3.8%

Apple Hospitality REIT

Apple Hospitality is a real estate investment trust, or REIT, that can fund consistent monthly dividends thanks to regular revenue. But this stock is renting hotel rooms in nearly 250 properties instead of renting storefronts to big consumer names.

Apple owns a host of in-demand and upscale properties in regions including New York City, Seattle and Boca Raton, Florida. Growth has admittedly been slower than some other stocks on Wall Street, but a monthly payout and generous yield make APLE worth a look for investors who want reliable income instead of a volatile stock that hopes to deliver on share price alone.

Current yield: 7.4%

Main Street Capital Corp.

This class of publicly-traded stock has a mandate to pay the lion’s share of profits to shareholders. That’s great news for income-oriented investors. With a consistent history of growing payouts, it’s worth looking at Main Street as a key part of your dividend portfolio in 2020.

Main Street Capital is a business development company or BDC. This means MAIN operates as a kind of investment fund, offering debt and equity capital. Its clients tend to be firms big enough they can’t self-finance or go to the local bank, but too small to access the stock market via an IPO or ask a big investment bank to underwrite a bond offering.

Current yield: 5.7%

Shaw Communications

If you don’t recognize Shaw, it’s not because this is one of those fly-by-night cellphone carriers with miniscule market share in the U.S. It’s because Shaw is a Canadian telecommunications outfit that primarily serves wireless customers north of the border.

Its customer base is smaller, but with recent investments in 5G technology, there is potential to keep growing beyond current levels. And more importantly, the monthly bills sent out to its customers help support regular monthly dividend payments that investors can rely on.

Current yield: 4.5%

Pembina Pipeline Corp.

Another monthly dividends stock in the energy space, Pembina is a $19 billion pipeline operator that has total capacity of roughly 3 million barrels of oil across its transportation and storage network. It’s safe to say that with a scale like that PBA will find plenty of customers even if the flow of fossil fuels slows slightly in 2020.

In 2017, Pembina paid $7 billion to purchase a fellow pipeline operator and is still trying to pay down some of that debt. But there is more than enough cash to go around, including to cover its above-average monthly payouts.

Current yield: 5%

Which Mutual Funds Gives Highest Monthly Dividend

1. Columbia Dividend Opportunity Fund (INUTX)

INUTX offers a diversified portfolio of holdings that include common stocks, preferred stocks, derivatives, and structured instruments for both U.S., and foreign securities of varying market capsized companies.

The primary criteria for selection of securities are the dividend payment. It has an expense ratio of 1.03%, and a dividend yield of 3.19% ttm. It has been paying regular dividends each quarter.

2. Vanguard High Dividend Yield Index Fund (VHDYX)

VHDYX is an index fund that attempts to replicate the performance of the FTSE High Dividend Yield Index. This index contains stocks of companies, which usually pay higher than expected, or greater than average, dividends. Being an index fund, VHDYX replicates the benchmark stock constituents in the same proportion.

This fund has maintained a consistent history of paying quarterly dividends since inception. Being an index fund, this has one of the lowest expense ratios of 0.14% and the most recent fund yield of 2.92% ttm. It may be a perfect low-cost fund for anyone looking for higher than average dividend income.

3. Vanguard Dividend Appreciation Index Fund (VDAIX)

VDAIX is an index fund, which attempts to replicate the performance of the benchmark NASDAQ US Dividend Achievers Select Index. This unique index consists of stocks that have been increasing the dividend payouts over time. Being an index fund, VDAIX replicates the benchmark stock constituents in the same proportion.

This fund has maintained a consistent history of paying quarterly dividends since inception. Being an index fund, this has one of the lowest expense ratios of 0.14%, and the fund yield is 1.84% ttm.

4. T. Rowe Price Dividend Growth Fund (PRDGX)

Based on the principle that increasing dividends over a period are positive indicators of a company’s financial health and growth, PRDGX looks to invest in large to mid-cap stocks, which have above-average growth in earnings and dividends.

It invests in both U.S. and global companies across diversified industry sectors, although the latter’s share usually remains in the single digits.

Though the current yield of 1.23% ttm may be lagging behind the S&P 500 Index’s yield of 2%, this fund offers a good mix of growth with dividend income. Being an actively managed fund, it has an expense ratio of 0.64% and has maintained a consistent history of quarterly dividend payment.

5. Vanguard Equity Income Fund (VEIRX)

This fund focuses on large and mid-cap domestic U.S. companies that are slow-growth but high-yield companies. The fund attempts to pick undervalued companies that pay above-average dividend income.

This fund has been paying regular quarterly dividends. Interestingly, this fund has a history of paying higher payouts particularly in the month of December (although sporadic), as visible from dividend payout history. It has an expense ratio of 0.18%, and a fund yield of 3.48% ttm.

Highest Paying Dividend Stocks

For investors looking for the best dividend stocks to buy and hold in 2020, several metrics matter.

Dividend stability reflects a long and steady track record of payouts. Dividend growth points to a company in sound financial health, working hard to make its stock more attractive to new and existing income investors.

A company with stable earnings is more likely to pay steady — and perhaps rising — dividends.

McDonald’s

The fast-food icon has raised its dividend every year since it first started paying a dividend in 1976.

Dividend yield: McDonald’s stock bears a $5.00 annual dividend, yielding 2.8%.

Five-year return: McDonald’s delivered a 94% compound stock market return over the past five years (not including reinvested dividends), vs. 34% for the S&P 500, as tracked by SPDR S&P 500 ETF (SPY).

Dividend growth rate: 8%, measured over the past five years.

Dividend stability factor: 2, on a scale from zero (most stable) to 99 (most volatile), over the past five years.

Dividend payout ratio: 73.7%.

Earnings stability factor: 3, on a scale from zero (most stable) to 99 (least stable), over the past five years. McDonald’s grew EPS at a 14% annual rate over this period.

Lockheed Martin

The aerospace and defense giant has paid dividends since 1995. It’s grown dividends 17 years in a row.

Dividend yield: Lockheed Martin stock offers a $9.60 annual dividend per share, for a 2.6% yield.

Five-year return: 90%.

Dividend growth rate: 13%.

Dividend stability factor: 7.

Dividend payout ratio: 39.8%.

Earnings stability factor: 8. Lockheed Martin grew earnings per share at a 16% annual pace over this period.

Texas Instruments

The chipmaker boasts 16 years in a row of growing dividends. It first declared a dividend in April 1962.

Dividend yield: Texas Instruments stock has a $3.60 annual dividend, yielding 3.4%.

Five-year return: 88%.

Dividend growth rate: 23%.

Dividend stability factor: 3.

Dividend payout ratio: 77.9%.

Earnings stability factor: 6. Texas Instruments grew EPS at a 20% annual clip the past five years.

Home Depot

The home improvement chain has paid a dividend for more than three decades. It has grown dividends for seven consecutive years.

Dividend yield: Home Depot stock provides a $6.00 annual dividend, for a 3.0% yield.

Five-year return: 80%.

Dividend growth rate: 32%.

Dividend stability factor: 7.

Dividend payout ratio: 60.1%

Earnings stability factor: 3. Home Depot grew EPS at a 19% annual rate the last five years.

Automatic Data Processing

The provider of HR and payroll solutions has a dividend history that stretches back to at least 1989.

Dividend yield: ADP stock pays a $3.64 annual dividend per share, yielding 2.5%.

Five-year return: 71%.

Dividend growth rate: 13%.

Dividend stability factor: 4.

Dividend payout ratio: 60.2%.

Earnings stability factor: 3. Automatic Data Processing grew EPS at a 17% annual rate the last five years.

Is it Better to Reinvest Dividends or Take Cash

One of the key benefits of dividend reinvestment is that your investment can grow faster than if you pocket your dividends and rely solely on capital gains to generate wealth. It’s also inexpensive, easy, and flexible.

Still, dividend reinvestment isn’t automatically the right choice for every investor. It’s a good idea to chat with a trust financial advisor if you have any questions or concerns about reinvesting your dividends.

What Type of Dividends Are Not Taxable

Qualified dividends are tax-free for individuals in the 10% and 12% tax brackets (or those earning less than $39,375 per year). For individuals in the 22%, 24%, 32%, and 35% tax brackets, dividends receive a 15% tax rate.

Dividends are taxed at a 20% rate for individuals whose income exceeds $434,500 (those who fall in either the 35% or 37% tax bracket).

Meanwhile, there are nonqualified dividends. These dividends do not meet the qualified dividend requirements and are treated as short-term capital gains. These qualified dividends are taxed at the same rates as an individual’s regular income. 

What Makes a Good Dividend Stock

If you plan to invest in dividend stocks, look for companies that boast long-term expected earnings growth between 5% and 15%, strong cash flows, low debt-to-equity ratios, and industrial strength.

What Are The Top 20 Dividends Stocks

Symbol	Company name	Dividend	Dividend yield
NHI	National Health Investors Inc. (REIT)	$1.10	9.27%
MO	Altria Group Inc.	$0.84	9.27%
UVV	Universal Corp	$0.76	7.34%
CM	Canadian Imperial Bank of Commerce	$1.46	7.32%
BNS	The Bank of Nova Scotia	$0.90	7.08%
BMO	Bank of Montreal	$1.06	6.76%
PFG	Principal Financial Group Inc.	$0.56	6.66%
BCE	BCE Inc.	$0.83	6.04%
CVX	Chevron Corp.	$1.29	5.73%
TD	The Toronto-Dominion Bank	$0.79	5.73%
IBM	International Business Machines Corp.	$1.63	5.58%
STX	Seagate Technology Plc	$0.65	5.41%
TRP	TC Energy Corp.	$0.81	5.24%
OMC	Omnicom Group Inc.	$0.65	5.18%
RY	Royal Bank of Canada	$1.08	5.12%
BXP	Boston Properties Inc. (REIT)	$0.98	5.11%
EVBN	Evans Bancorp Inc.	$0.58	5.02%
ALE	ALLETE Inc.	$0.62	4.94%
SLF	Sun Life Financial Inc.	$0.55	4.86%
MTB	M&T Bank Corp.	$1.10	4.76%

Which Stock is Best to Buy Right Now

Microsoft Stock

Microsoft stock is currently in range from a 180.10 handle in what’s either a cup-with-handle or double-bottom base. MSFT stock, which has found support at the 21-day line a few times in recent weeks, is also close to an alternate entry of 187.61. In this case, this tight trading has formed essentially another handle within the base.

On June 5, the Dow tech giant rose to 187.73, briefly clearing the new entry before closing just below that key level.

The relative strength line has pulled back in the past few weeks as Microsoft stock moved sideways while the broader market spiked. But MSFT stock outperformed through the market crash and in the current stock market rally. The RS line, the blue line in the charts below, tracks a stock’s performance vs. the S&P 500. The stock has a near-perfect IBD Composite Rating of 98.

Microsoft stock has been outperforming the S&P 500 index for years. So it’s no surprise that MSFT stock is a member of the prestigious IBD Long-Term Leaders list. Stocks on this list stabilize your portfolio but quietly deliver stellar long-term gains. To qualify as a Long-Term Leader, a stock has to have stable earnings, stable price outperformance and high-quality institutional sponsorship. These stocks can be bought on pullbacks or on breakouts.

Microsoft earnings growth has been strong, fueled by cloud-computing services that are in high demand during work-at-home coronavirus shutdowns. On April 29, the Microsoft earnings report for fiscal Q3 showed a 23% EPS gain while revenue rose 15%, the best top-line growth in six quarters.

Microsoft’s Commercial Cloud business saw revenue jump 30% year over year to $13.3 billion in its fiscal third quarter. Its Azure cloud-computing services surged 62%. The Microsoft Teams video-calling, chat and collaboration suite keeps workers connected.

Analysts see Microsoft earnings rising 20% in fiscal 2020 and 9% in 2021.

Microsoft stock is one of only a handful of U.S.-listed companies with trillion-dollar market caps. Indeed, Microsoft stock is once again worth more than Apple, for now. In this case big is beautiful as Microsoft stock has a perfect IBD Composite Rating of 99.

Apple Stock

Apple stock is in a buy zone after breaking out from a cup-with-handle base. The ideal buy point is 319.79, but the 5% chase zone runs up to 335.78. The mobile phone manufacturer’s stock hit a record high on June 5.

The relative strength line for Apple stock is around record highs. Apple stock has a strong Composite Rating of 90 out of a best-possible 99, but the IBD Stock Checkup tool shows earnings growth has been disappointing of late. It has averaged 5% growth over the past three quarters, though earnings growth is accelerating.

The firm managed to beat Wall Street’s targets for its coronavirus-impacted March quarter. The Cupertino, Calif.-based company earned $2.55 a share on sales of $58.31 billion in its fiscal second quarter ended March 28. Analysts were looking for Apple earnings of $2.26 a share on sales of $54.54 billion.

Apple is also weighing whether to delay the launch of its first 5G smartphones by months, possibly into 2021. The coronavirus pandemic has threatened Apple’s production schedule as well as global demand.

Epam Systems Stock

Epam stock is in a buy zone after breaking out from a cup-with-handle chart pattern. The ideal entry point is 235.13.

The relative strength line has also been generally making progress, though it has been declining slightly over the past month.

Like Microsoft, Epam stock is an IBD Long-Term Leader. The Stock Checkup Tool shows earnings are a key strength, rating even higher than its stock market performance. Over the past three years EPS has grown by an average of 26%, just above CAN SLIM requirements. It has grown by a more modest average of 17% over the past three quarters. It has a very strong Composite Rating of 94.

Epam specializes in custom software development and platform engineering services. Most of its computer software developers come from Eastern Europe, with offshore centers in Belarus, Ukraine, Russia and Hungary.

While the coronavirus crisis has impacted its customers in the travel and consumer sectors, the stock is now rebounding well. A focus on “digital transformation” projects will be a “logical area of spending” for the recent IBD Stock Of The Day, according to William Blair analyst Maggie Nolan. This will include customer service initiatives like chatbots, turning paperwork into electronic records, automating business workflows and data analytics.

“In what is emerging as a consistent theme across the industry, Epam is focused on the long-term health and opportunity for the business and therefore minimizing disruption to its talent base while balancing controlling costs, including labor costs,” Nolan said in a recent note to clients. “Epam expects a post-virus world where its core digital services are in even higher demand.”

UnitedHealth Stock

The managed care stock has been trading above or below multiple buy points in recent weeks, including 304.10. But UnitedHealth stock had been hitting resistance at its old highs, with an alternate entry of 306.81. On June 5, UNH stock closed above that old high for the first time.

The outperformance of UNH stock is reflected in its relative strength line. It is well above February levels, though it is just below its April 16 peak, amid the Covid-19 relief rally.

UnitedHealth stock has been leading a move among managed care stocks, which are showing strength as the coronavirus stock market rally rotates beyond big tech.

UNH stock has a strong IBD Composite Rating of 95 out of a possible 99. The Stock Checkup Tool shows earnings have grown by an average 22% over the past three years. This is good for such a big company, even though it is just below CAN SLIM requirements of 25%.

Its potent mix of stock market and earnings performance has seen it added to the Long-Term Leaders list.

After topping first quarter estimates with “minimal impact” from Covid-19, UnitedHealth maintained full-year earnings guidance, predicting positive and negative effects to roughly offset.

UnitedHealth is not a high-growth tech name, but that can be a plus. Its status as a Long-Term Leader and as a non-tech company means it can offer balance to a portfolio that is heavy on volatile growth stocks.

Dexcom Stock

The diabetes treatment company’s shares are buyable after the stock staged a bullish rebound from 50-day and 10-week lines. However, it is worth noting the relative strength line has been declining in recent weeks. Overall though, the RS line has been behaving extremely bullishly since late October.

Dexcom stock has an almost-perfect Composite Rating of 98. The Stock Checkup Tool shows earnings growth is not as strong as the firm’s technical performance. Nevertheless average earnings growth of 448% over the past three quarters is mighty impressive. It also accelerated to 980% growth in the most recent quarter.

Dexcom stock previously shot to a record high following the medical product firm’s big earnings beat in early November. Dexcom earnings exploded 261% to 65 cents a share, more than triple analyst estimates for 20 cents. Revenue of $396.3 million also crushed views for $347.9 million.

Dexcom sells continuous glucose monitors, or CGMs, for patients with diabetes. Its newest CGM is called G6. These devices are bringing rapid changes to the way doctors treat diabetes Many patients are now receiving the medical devices through pharmacies. This has lowered the barriers to adoption and led to a spike in demand.

For patients with Type 1 diabetes and insulin-intensive Type 2 diabetes, glucose monitors and insulin pumps can offer a technological replacement for finger sticks and multiple daily injections. Dexcom, Abbott (ABT) and Medtronic (MDT) sell glucose monitors. Tandem Diabetes (TNDM), Insulet (PODD) and Medtronic make insulin pumps.