Invest in Dividend Stocks

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Invest in Dividend Stocks

Invest in dividend stocks for security and a steady income. There are companies that have routinely paid quarterly dividends for as much as a century. If you want to sleep at night invest in dividend stocks. A contrarian might argue that buy investing in a secure stock that you will give up the potential for growth. However, good dividend stocks typically outperform the Standard and Poor’s 500 stock index over a decade.

What Are Dividends?

A company that makes money oftentimes pays a portion of its profits to shareholders on a quarterly basis. Sometimes this dividend is a onetime payment based on exceptional circumstances. However, when we suggest that you invest in dividend stocks we are talking about companies that send a shareholder a check every fiscal quarter. Dividends from a strong company are a reliable source of cash. They are also proof of the strength of the company and should be considered when doing fundamental analysis of a stock. In some ways dividends are like interest from bonds. A secure company will pay a set dividend that does not change with prevailing interest rates. Thus the price of the stock may go up with lower interest rates and down with higher rates.

High Dividends of Consistent Dividends

The general reason to invest in dividend stocks is long term, consistent dividends. This is what helps you sleep at night as a stock investor. The higher the dividend the better but if a company is stealing from R&D capital to pay dividends it might just be getting a little too desperate to keep its share price up. For long term reliable dividends companies like Colgate, Clorox and Proctor and Gamble come to mind. These reliable consumer products companies keep making money year in and year out. If you do not want to wake up some morning to find that your stock portfolio has evaporated invest in dividend stocks like these. Other sources of reliable and healthy dividends are utility companies.

Finding Good Dividend Stocks

Running a stock screen is a good way to find companies that pay dividends. If you require a certain percentage dividend return set the stock screen to show only stocks that make the cut. Look at how long the company has been paying dividends and check to see if there are gaps in their payment record. Along the way look at the general margin of safety of the company and its intrinsic stock value. You can always profit by using fundamental analysis. Well managed companies with strong profits and competent cost containment typically pay good dividends and are good investments for the long term. For a well balanced stock portfolio, investors commonly invest in dividend stocks as part, growth stocks as part, and invest in a mix of market sectors as well. Remember that dividend stocks commonly increase in value during a down market.

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Invest in Dividend Stocks

  1. 1. INVEST IN DIVIDEND STOCKS www.ProfitableInvestingTips.com
  2. 2. Invest in dividend stocks for security and a steady income.www.ProfitableInvestingTips.com
  3. 3. There are companies thathave routinely paid quarterly dividends for as much as a century.www.ProfitableInvestingTips.com
  4. 4. If you want to sleep at night invest in dividend stocks. A contrarian might argue that buy investing in a secure stock that you will give up the potential for growth.www.ProfitableInvestingTips.com
  5. 5. However, good dividend stocks typically outperformthe Standard and Poor’s 500 stock index over a decade.www.ProfitableInvestingTips.com
  6. 6. What Are Dividends? www.ProfitableInvestingTips.com
  7. 7. A company that makes money oftentimes pays a portion of its profits toshareholders on a quarterly basis.www.ProfitableInvestingTips.com
  8. 8. Sometimes this dividend is a onetime payment based on exceptional circumstances.www.ProfitableInvestingTips.com
  9. 9. However, when we suggestthat you invest in dividendstocks we are talking about companies that send a shareholder a check every fiscal quarter.www.ProfitableInvestingTips.com
  10. 10. Dividends from a strong company are a reliable source of cash. They are also proof of thestrength of the company and should be considered when doing fundamental analysis of a stock.www.ProfitableInvestingTips.com
  11. 11. In some ways dividends are like interest from bonds. A secure company will pay a set dividend that does not change with prevailing interest rates.www.ProfitableInvestingTips.com
  12. 12. Thus the price of the stock may go up with lowerinterest rates and down with higher rates.www.ProfitableInvestingTips.com
  13. 13. High Dividends ofConsistent Dividends www.ProfitableInvestingTips.com
  14. 14. The general reason to investin dividend stocks is longterm, consistent dividends. www.ProfitableInvestingTips.com
  15. 15. This is what helps you sleepat night as a stock investor. www.ProfitableInvestingTips.com
  16. 16. The higher the dividend the better but if a company isstealing from R&D capital to pay dividends it might just be getting a little too desperate to keep its share price up.www.ProfitableInvestingTips.com
  17. 17. For long term reliable dividends companies likeColgate, Clorox and Proctorand Gamble come to mind.www.ProfitableInvestingTips.com
  18. 18. These reliable consumer products companies keep making money year in and year out. If you do not want to wake up some morning to find that your stock portfolio has evaporated invest in dividend stocks like these. www.ProfitableInvestingTips.com
  19. 19. Other sources of reliable andhealthy dividends are utility companies. www.ProfitableInvestingTips.com
  20. 20. Finding Good Dividend Stocks www.ProfitableInvestingTips.com
  21. 21. Running a stock screen is agood way to find companies that pay dividends.www.ProfitableInvestingTips.com
  22. 22. If you require a certain percentage dividend returnset the stock screen to show only stocks that make the cut.www.ProfitableInvestingTips.com
  23. 23. Look at how long the company has been payingdividends and check to see if there are gaps in their payment record.www.ProfitableInvestingTips.com
  24. 24. Long the way look at thegeneral margin of safety of the company and its intrinsic stock value.www.ProfitableInvestingTips.com
  25. 25. You can always profit byusing fundamental analysis.www.ProfitableInvestingTips.com
  26. 26. Well managed companies with strong profits andcompetent cost containmenttypically pay good dividendsand are good investments for the long term. www.ProfitableInvestingTips.com
  27. 27. For a well balanced stock portfolio, investorscommonly invest in dividendstocks as part, growth stocks as part, and invest in a mix of market sectors as well. www.ProfitableInvestingTips.com
  28. 28. Remember that dividendstocks commonly increase invalue during a down market.www.ProfitableInvestingTips.com
  29. 29. As such it can be possible tobuy these in anticipation of arecession and sell when theymove contrary to the market. www.ProfitableInvestingTips.com

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