Do the highest yielding dividend shares offer the best passive incomes?

Many investors may naturally be drawn to the highest yielding dividend shares when seeking to make a passive income. After all, they offer the greatest potential income return on a relative basis.

However, it could be prudent to check their dividend affordability before buying them. While this does not guarantee that they will be able to make future dividend payouts, it can be a means of ruling out stocks that are clearly not able to afford their shareholder payouts.

Similarly, assessing the growth potential of a company’s dividend can be a sound move. It may allow an investor to obtain a growing passive income in the long run.

Assessing affordability when buying dividend shares

The affordability of shareholder payouts can be…