High Dividend Stocks. Income requires solid Dividend Growth.
Making High Dividend Stocks Work for you
Those dividend stocks aren't just for stay-at-home moms and nursery school teachers anymore. Stocks that pay just to own them are causing quite the brew-ha-ha. This can be thanks to the big-names involved, such as in the new tax law and the first-ever dividends that have been issued by high- profile companies like FedEx and the Outback Steakhouse.
Many want to know how they can find the best stocks that pay high dividends? They also want to know which high dividend stocks to stay away from?
There are some tried and true ways of knowing if a high dividend stock is a good candidate or if it simply is not.
We all know that the way to make money on regular stocks is by selling them at a higher price. High dividend stocks pay you to own them, no need to depend only on the stock's gains or on a strong market to make your money.
There's good news to be told. Stocks with solid dividend prospects won't go down as much as other stocks, because just when they start to falter, the resulting rise in dividend yield will attract more buyers.
The dividends mentioned are the cash dividends that companies pay on a quarterly basis. Excluded are the stock dividends sometimes used to implement stock splits or company spin-offs or one-time cash payments.
Expect that your broker can add the dividend you've received to your cash account. Other brokers can offer automatic reinvestment plans. With this plan, your dividends can be used to purchase additional shares, even when the dividend equates to only a tiny fraction of the share. As well, there are many dividend-paying companies that offer similar plans. These are dividend reinvestment plans (DRIPs,) and they are for shareholders who buy directly from the company.
You might want to think of utilities when the talk turns to dividends. There are lots of good choices. Banks and a variety of manufacturing and service companies will also offer you them. Such stocks can pay high dividends, equaling a dividend yield as high as 4.5%.
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