When evaluating dividend paying stocks, consider the following factors: 1. Dividend Yield: This is the annual dividend payment divided by the stock price. A higher yield can indicate a better return on investment. 2. Payout Ratio: This ratio shows the proportion of earnings paid out as dividends. A lower payout ratio can suggest that dividends are sustainable. 3. Dividend Growth Rate: Look for companies that have a history of increasing their dividends over time. 4. Financial Health: Assess the company’s financial statements to ensure it has a strong balance sheet and consistent cash flow.