Which of the following is a characteristic of income stocks?

Income stocks are primarily characterized by their focus on providing shareholders with regular and substantial dividend payments. These stocks typically belong to established companies that have a history of stable earnings, allowing them to distribute a portion of their profits in the form of dividends. By paying higher-than-average dividend returns, income stocks serve as a reliable income source for investors, especially those seeking to generate revenue from their investments rather than relying solely on capital appreciation.

Investors are usually attracted to income stocks because they can provide a steady cash flow, making them particularly appealing during volatile market conditions when capital appreciation may be more difficult to achieve. This characteristic is essential for pension plans and other income-focused investors looking to secure predictable returns while managing risk.