Find stocks with high
dividends here to add to your investment portfolio. Remember to consider the stock's dividend history.
You may want to restrict your purchases to companies which have had a
steady increase in dividend payout over several years. Some of the best
paying dividend stocks offer high dividend yields and tax
advantages, too. Many real estate investment trusts, or REIT stocks, pay
high dividends to their stockholders. Weigh risk and financial health when seeking the highest dividends. Dividends are
beneficial because you get payments for simply holding a stock. So, you
won't be strictly focused on hoping to make a profit when you sell
your shares.
In general, high dividend stocks are not as volatile as the market taken
as a whole. When there's a price drop, the dividend yield goes up; that
may attract other buyers, and thus the price is supported. In these tough
financial times, it may benefit you to place at least part of your
portfolio in dividend-paying stocks.
In today's market, one of the most overlooked areas of
investing is the purchase of so called "income stocks," or those
stocks whose income implications for your portfolio trump the lower annual
return that they may entail or the investment into companies that may not seem
like the "hot stocks" on the market. Indeed, investing in income
stocks is a strategy that was popular in the last generation, when returns on
the open market were lower per year and many people were more concerned about
protecting their principal than about getting rich quickly in the stock market.
Despite this shift in the general focus of the market players, there are still
people who make a good deal of money using the income stock investment strategy.
Of course, the income that is derived from a stock comes
primarily in the form of a dividend. While dividends are becoming a harder and
harder thing to find for many companies, as they are slowly being phased out in
many firms in favor of reinvestment of profits or other uses as opposed to the
profits being given back to the consumer, the average investor can still find
companies that offer dividends to their shareholders, many of which offer
enough dividends to make them a great addition to a portfolio.
Here's an expert who explains the advantages of dividend to the average investor. This video really explains how to choose an international dividend paying stock with care:
The typical consumer, however, has very little knowledge
today about what makes a good company to invest in for the purpose of reaping
dividends. In reality, the information that one needs to pay attention to is
usually on the financial information page of a company's profile on an internet
investment information site. The biggest key to selecting a good dividend stock
is the dividend yield - which is the percentage of dividends paid out as
compared to the price of the stock. This means that a company who has a low
price but a high dividend payout will have a higher dividend yield, which is
great for the investor looking to dive into the market for the purpose of
buying cheap stock with a high income prospect.
To this end, companies that have high dividend yields come
in two flavors - companies that have been abnormally profitable and want to
give something back to the investor in the short term and those whose dividends
and profits have been consistent in the long term. Many well established
companies that are profitable will have a long record of providing dividends to
their investors. Be wary of companies with a high yield but a record of paying
low or no dividends in previous investment quarters.
Choosing companies in stable industries with growth potential
can insure that the dividends will be paid out for the long term rather than
the short term. Many companies who have strong dividend payment records will be
those that can weather the storm of an economic downturn without affecting the
dividend payout too severely and will likely be in business when the economy
turns around. Choosing stable companies whose business history allows them to
continue operating into the future can allow you to reap the income from
dividends for a long time to come.
Ultimately, choosing a company for an income investment
strategy where dividends drive the portfolio growth can be a safe way to
experience gains in your investments without putting your money at risk. Most
companies who pay high dividends are safe, established companies that will
allow you to gain income and keep your investment safe for years to come. While
it may not be the best way to get rich on the stock market, many people in the
past and present have made a great deal of money through investing in high dividend
stocks.
If your stock research
has not turned up many dividend stocks that you like, consider mutual
funds which specialize in high yield, high return dividend-payers. A REIT,
or real estate investment trust, may offer good dividend yield and may
specialize in one type of real estate assets, say, shopping centers. A
REIT may have properties in only one limited area of the country. The
stock market is changeable; stockbrokers know that
as baby boomers
approach retirement, many are looking at dividend stocks to give them a
source of extra income during those years. Many whose company pensions are
smaller than anticipated, or whose company has cut medical benefits for
retirees, are finding stocks with high dividend payouts to be quite
attractive. If you're approaching retirement, you may wish to have an
annuity, some high-dividend stocks, and perhaps even a reverse mortgage,
or an I-bond or two as a hedge against inflation. The stock market has hundreds of dividend paying equities. Ask
your stock broker what s/he recommends to enhance your investment
portfolio.
Which stocks have
the highest dividend rates?
This book from the respected Standard and Poor company has solid advice
about choosing stocks: The Standard & Poor's Guide to Building Wealth with Dividend Stocks
Among the stocks
offering the highest dividends today, some are relatively new companies,
and some have been giving out distributions for decades. You may prefer a
consumer banking firm, or an energy stock, a real estate investment trust
( a REIT ),
or a shipping company. With REITs, an investor can feel that she/he
participates in owning real properties, whether it's apartments, shopping
centers, hotels, or others. There are not as many high-tech stocks that pay
large dividends, but some tech companies have started to increase
dividends gradually.
It's also worthwhile to check out non-U.S. companies,
like banks and telecoms. Some of the online stockbrokers, like Morningstar
and Wachovia, have great search and filter options, so you can get
yourself a free report of, for example, stocks in your favorite sector
which yield over 6%. There are lots of good publications you can read, that often have excellent articles on buying dividend
stocks, how to evaluate high-yield stocks, and how to set up a dividend reinvestment plan ( a DRIP ).
Here are some books
about dividend investing that describe wise investment strategies for
investors seeking high dividends. Click anywhere on the image,
and Amazon lets you look inside the book. You can see the Table of
Contents and read within chapters, too.
Be aware that no company's dividend is guaranteed. There is always a risk
that a stock that has heretofore paid a regular dividend could stop paying
dividends to its shareholders. Therefore, it's important to study the
financial health of a company and to do some homework in terms of research
into the stock's value and market factors that may affect the future
dividend payout.
Stocks are part of a well-balanced investment portfolio. Dividends, in
a very simple form, are the payments of money to stockholders of a
company, rather than being held and plowed back into the company as
retained earnings. This payment of money is referred to as a cash
dividend. Quite often, a company will offer its stockholders additional
shares of stock in lieu of cash. This is known as a stock dividend.
Dividends which are reinvested into additional shares of stock provide
a good investment vehicle for the stockholder. This form of dividend is
not taxed until it is sold at some time in the future, the optimum time
being after the stockholder’s retirement. Then, the invested dollars
are taxed at a lower rate than if the stockholder were younger and
still employed. This strategy offers both tax savings and a steady cash
flow, or dividend income, for retirees.
Depending on which stocks are purchased, the stock dividend yield can
often be quite high, especially if a particular company is experiencing
some distress. Less-stable companies will have a high dividend yield as
a way of rewarding the risks investors are exposed to. These are
generally better for those with a longer time horizon and more years
until retirement.
offer high dividend yields and tax
advantages, too. Many real estate investment trusts, or REIT stocks, pay
high dividends to their stockholders. Weigh risk and financial health when seeking the highest dividends. Dividends are
beneficial because you get payments for simply holding a stock. So, you
won't be strictly focused on hoping to make a profit when you sell
your shares.
In general, high dividend stocks are not as volatile as the market taken
as a whole. When there's a price drop, the 
