Dividend paying stocks
According to Investopedia, dividend is Distribution of a portion of a company’s earnings, decided by the board of directors, to a class of its shareholders. The dividend is most often quoted in terms of the dollar amount each share receives (i.e. dividends per share or DPS). It can also be quoted in terms of a percent of the current market price, referred to as dividend yield.
These are typically not your high flying “sexy” stocks. Generally they are anything but and rather are “boring”. But when times are tough these generally weather the market best.
From a tax perspective, they’re hard to beat: dividends are taxed at only 15%. Previously, dividends were hit at full income-tax rates.
There are a lot of stocks that paying quarterly or yearly dividends. Over time, the power of compounding (with a little help from inflation) can substantially increase the value of your dividends.
Most companies try to keep dividends the same or gradually increase them over time. The stock market rewards a dividend increase by pushing the stock price higher , a reduction on the other hand generally means things might not be going all that well. However, there might be genuine reasons ( increasing r & d etc ) when this might not be that bad.
You can buy dividend paying stocks from a broker or online trading accounts. You can even buy drip accounts from the companies and they invest the dividends back into more stock for you. This is the lowest cost way to buy stocks it is almost free stocks. This is called dividend reinvestment plans.
There are lot of good companies paying very high decent dividends these days as the stock prices have come down. However, I think on that really stands out in Johnson And Johnson ( ticker symbol JNJ ).
They are not one the highest paying dividend stocks but they are one of the best investments for the last 15 years. They pay dividends every quarter and have increased them every so often.
JNJ stock can be bought in a drip plan so you do not need a broker. Generally there is a minimum requirement ( 250$ – $500 ) to start the dividend stock plan. They reinvest the dividend for you and buy more stock with it. This is one of the easiest ways to invest in the stock market and not use a broker or pay high broker fees.
One of the best ways to look for high dividend stocks is using a stock screener (yahoo.finance.com, google.finance , msn etc )
Here is an example using MSN : Div Paying Stocks
Next we will see what are dividend ETFS.