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What to Look for in a
Dividend Stock
By www.ProfitableInvestingTips.com
http://profitableinvestingtips.com/profitable-investing-tips/what-to-look-for-in-a-dividend-
stock
Dividend stocks are the basis of a
sound retirement portfolio.
http://profitableinvestingtips.com/profitable-investing-tips/what-to-look-for-in-a-dividend-
stock
As Motley Fool says in its best of
breed article about dividend
stocks, these stocks provide
investors with three great
benefits.
http://profitableinvestingtips.com/profitable-investing-tips/what-to-look-for-in-a-dividend-
stock
Before We Continue…
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http://profitableinvestingtips.com/profitable-investing-tips/what-to-look-for-in-a-dividend-
stock
Dividend payments provide three
major benefits to shareholders.
http://profitableinvestingtips.com/profitable-investing-tips/what-to-look-for-in-a-dividend-
stock
The first one is obvious: They put
more money in your pocket.
http://profitableinvestingtips.com/profitable-investing-tips/what-to-look-for-in-a-dividend-
stock
If you’re up on your position, that
means icing on the cake; if not,
then a dividend is a hedge
against your current unrealized
losses.
http://profitableinvestingtips.com/profitable-investing-tips/what-to-look-for-in-a-dividend-
stock
Secondly, dividend payments act
as a beacon for Wall Street and
investors, alerting them to the
sustainability and profitability of a
company’s business model.
http://profitableinvestingtips.com/profitable-investing-tips/what-to-look-for-in-a-dividend-
stock
If a business has consistently
paid a dividend to its
shareholders and raised that
dividend on a somewhat regular
basis, then it’s signaling to
investors that it has confidence in
its long-term business model.
http://profitableinvestingtips.com/profitable-investing-tips/what-to-look-for-in-a-dividend-
stock
In essence, why would a
business share its profits with
investors if it feared for its
intermediate or even long-term
profitability?
http://profitableinvestingtips.com/profitable-investing-tips/what-to-look-for-in-a-dividend-
stock
Lastly, what makes dividends
such a transformative investing
tool is that they can be reinvested
back into the same stock.
http://profitableinvestingtips.com/profitable-investing-tips/what-to-look-for-in-a-dividend-
stock
Using your payout to purchase
additional shares of stock can
supercharge your portfolio and,
depending on your time frame to
retirement, multiply your nest
egg.
http://profitableinvestingtips.com/profitable-investing-tips/what-to-look-for-in-a-dividend-
stock
But what do you look for in a
dividend stock?
http://profitableinvestingtips.com/profitable-investing-tips/what-to-look-for-in-a-dividend-
stock
Higher dividends are better that
lower.
http://profitableinvestingtips.com/profitable-investing-tips/what-to-look-for-in-a-dividend-
stock
A long history of dividend
payments tells you that the
business model of the company
is sound.
http://profitableinvestingtips.com/profitable-investing-tips/what-to-look-for-in-a-dividend-
stock
And if the company offers
reinvestment of dividends you
avoid having to pay a
commission in order to gain more
stock.
http://profitableinvestingtips.com/profitable-investing-tips/what-to-look-for-in-a-dividend-
stock
Dividends and Interest
Rates
http://profitableinvestingtips.com/profitable-investing-tips/what-to-look-for-in-a-dividend-
stock
Dividend stocks are an
alternative to buying bonds.
http://profitableinvestingtips.com/profitable-investing-tips/what-to-look-for-in-a-dividend-
stock
Power companies typically pay
dividends that are competitive
with bonds but are stable
companies with little growth.
http://profitableinvestingtips.com/profitable-investing-tips/what-to-look-for-in-a-dividend-
stock
Their share prices rise and fall
inversely to interest rates.
http://profitableinvestingtips.com/profitable-investing-tips/what-to-look-for-in-a-dividend-
stock
That is because the company has
a fairly stable dividend that does
not go up when interest rates go
up.
http://profitableinvestingtips.com/profitable-investing-tips/what-to-look-for-in-a-dividend-
stock
So, the stock price falls as rates
rise. The New York Times reports
on how rising long term interest
rates are depressing the market.
http://profitableinvestingtips.com/profitable-investing-tips/what-to-look-for-in-a-dividend-
stock
An increase in long-term interest
rates rattled investors on
Tuesday, nudging major United
States stock indexes lower for the
second day in a row.
http://profitableinvestingtips.com/profitable-investing-tips/what-to-look-for-in-a-dividend-
stock
Traders around the world have
been selling off government
bonds in recent weeks.
http://profitableinvestingtips.com/profitable-investing-tips/what-to-look-for-in-a-dividend-
stock
That trend accelerated on
Tuesday, bringing down bond
prices and, in turn, driving up the
benchmark United States bond
yield to its highest level since late
November.
http://profitableinvestingtips.com/profitable-investing-tips/what-to-look-for-in-a-dividend-
stock
The point is that when rates go
up stocks, and especially
dividend stocks go down.
http://profitableinvestingtips.com/profitable-investing-tips/what-to-look-for-in-a-dividend-
stock
Ideally what to look for in a
dividend stock is a company that
will thrive when rates go up, such
as a bank.
http://profitableinvestingtips.com/profitable-investing-tips/what-to-look-for-in-a-dividend-
stock
Or, simply wait until rates go up
and purchase the dividend stock
when it is cheap.
http://profitableinvestingtips.com/profitable-investing-tips/what-to-look-for-in-a-dividend-
stock
A Long Term Investment
http://profitableinvestingtips.com/profitable-investing-tips/what-to-look-for-in-a-dividend-
stock
Dividend stocks belong in your
portfolio for the long term.
http://profitableinvestingtips.com/profitable-investing-tips/what-to-look-for-in-a-dividend-
stock
So, what to look for in a dividend
stock is a company that has been
paying dividends for decades or
even a century.
http://profitableinvestingtips.com/profitable-investing-tips/what-to-look-for-in-a-dividend-
stock
The point is to receive and roll
over dividends year by year for
decades and let the exponential
increase in your holdings make
you rich.
http://profitableinvestingtips.com/profitable-investing-tips/what-to-look-for-in-a-dividend-
stock
Oil dividend stocks are
considered by many to be ideal
for such a strategy.
http://profitableinvestingtips.com/profitable-investing-tips/what-to-look-for-in-a-dividend-
stock
Read what Motley Fool has to
say again.
http://profitableinvestingtips.com/profitable-investing-tips/what-to-look-for-in-a-dividend-
stock
Kinder Morgan (NYSE: KMI ) is
one of my favorite high-yield
dividend growth stocks and a
major reason for this is because
of how well it’s been able to
handle the oil crash.
http://profitableinvestingtips.com/profitable-investing-tips/what-to-look-for-in-a-dividend-
stock
Let’s look at five key facts from
Kinder’s recent conference call
that show why the company is
likely to thrive even in a world of
lower energy prices.
http://profitableinvestingtips.com/profitable-investing-tips/what-to-look-for-in-a-dividend-
stock
“Our average realized oil price
per barrel in our CO2 segment
was $72.62 in the first quarter of
’15, versus $91.89 in the same
quarter a year ago.
http://profitableinvestingtips.com/profitable-investing-tips/what-to-look-for-in-a-dividend-
stock
And the average Henry Hub price
for natural gas was $2.98 in the
first quarter of ’15 versus $4.94 in
the first quarter of ’14.” Richard
Kinder, founder, chairman, and
CEO
http://profitableinvestingtips.com/profitable-investing-tips/what-to-look-for-in-a-dividend-
stock
Picking long dividend stocks is
like picking any long term
investment.
http://profitableinvestingtips.com/profitable-investing-tips/what-to-look-for-in-a-dividend-
stock
You want to see proof that the
company’s business plan works
now and will continue to work for
a long, long time.

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What to Look for in a Dividend Stock