Click here to load reader

Six Tips to Picking the Perfect Dividend Stock

  • View

  • Download

Embed Size (px)


If you’re starting to invest in dividends, here are six tips to make sure you buy the right Dividend stock! Visit for free newsletter Dividend Stocks, Six tips to picking the right dividend stock, Perfect Dividend Stock, Best Dividend stock, Dividend Stock P/E ratios

Text of Six Tips to Picking the Perfect Dividend Stock

  • 1. Welcome to Dividend Stocks Research Your premier site for Rankings and Reviews of the best dividends stocks around. For more info on dividend stocks visit our websiteClick Here

2. Hi, My name is Aaron and Im with Dividend Stocks Research. Today were reviewing our recently published article 3. Six Tips to Picking the Perfect Dividend Stock 4. If youre retired, or about to retire, any extra income is going to be welcome relief and thats probably why youre looking a dividend stocks. 5. You are trying to pump the proven power of dividends into your portfolio but you need to be careful. 6. How do you know what the best dividend stock for you is? 7. Well, begin with the end in mind. You want your portfolio to reward you with the historically strong combination of both capital appreciation and dividend income! 8. Here are six quick topics to think about before making your tradeLook for consistent dividend increases.Dont pay too much keep the P/E Ratio under 20Watch the Payout RatioLook for the warning signsMake sure youre comfortablePut your money to work! 9. So, lets look at each one of these a little more closely 10. How To Find a Good Dividend Stock 11. If a company is increasing their dividends year in and year out, it probably means theyre doing something right! So, you should look for companies that have been consistently increasing their dividends. 12. There are more than 200 U.S. stocks that have been able to increase their dividends for at least ten years in a row. 13. You can find these stocks by setting up screens with your brokerage account. 14. You can also go directly to the mother lode of dividend stocks, the S&P Dividend Aristocrats. This is the Elite selection of the 200 stocks with consistent dividend increases. 15. The S&P Dividend Aristocrats is a lineup of stocks in the S&P 500 that have increased their dividend payouts for 25 consecutive years. 16. But true to their name, these Aristocrats can be a bit pricey. 17. Because the market always shifts from one phase to another, dividend stocks drift in and out of favor. When they are the markets darlings, they can easily become overvalued. 18. Quality just doesnt show up very often with a bargain price tag. But you also dont want to pay too much for a stock, so you should usually steer clear of a stock with a P/E Ratio (Price/Earnings Ratio) thats higher than 20. 19. Once you found a great company with consistent dividend increases, and a low P/E, next you want to look at the payout ratio. 20. You dont have to dig too deep to make sure the dividend thats being paid today has a good chance of being paid tomorrow. All you need to do is check out the companys dividend payout ratio. 21. The payout ratio is simply the percentage of earnings a company pays in dividends. While investors want to be well taken care of by the company, management has an obligation to take care of the companys future. 22. Too much money going into dividend payments, and not enough going into research, or strengthening the balance sheet, and you can count on trouble ahead. 23. And keeping an eye out for trouble is never a bad thing. So heres what else could be a sign of tough times ahead. 24. Watch Out For These Warning Signals 25. The most obvious signal is a dividend thats been cut. When this happens, you cant help but wonder if this is just the tip of the iceberg. 26. Dividends that are cut dont just hurt your yield. They usually hurt the price of the stock as well. You just dont run into many situations where stock prices go up when dividend payments go down. 27. And what about when stock prices go down? Thats another cause for concern, because falling stock prices usually dont go hand in hand with growing dividend payments. 28. These are fairly easy signals to read. But theres another signal that can be trickier, and thats the actual yield a stock pays. 29. How high a yield should you feel comfortable with when you start investing in dividend stocks? 30. Because the higher the yield, the higher the risk, this decision should reflect your tolerance for risk, your investment goals, and your investment timeline. 31. High yields are not automatic danger signals. 32. But they should prompt you to take a long, hard look at the companys management team. Decide if they are both willing and able to continue paying dividends. 33. Theres something else to keep an eye on. Look at the same thing the management team looks at. 34. Keep An Eye On The Balance Sheet 35. When it starts to show signs of running short on cash, run for the exits, because chances are there will be a dividend cut coming. 36. This is what happened to GE in 2009. The company cut its dividend for the first time in 71 years. 37. GE Chairman Jeffrey Immeltcalled the move, The right precautionary action at this time. 38. Before the dividend was cut, the yield was 14%. Why so high? GEs stock price had been taking a beating. 39. These are some of the warning signals you can watch for. And they are reminders that when you start dividend investing, it is a good idea to balance your dividend stocks between high yields and more modest yields. 40. So once youve done a bit of homework, its time to make your move. 41. Make sure youre comfortable with what the company does, and how its future looks. Then you need to strike when the iron is hot. 42. Once youve made up your mind, make your investment, and make your money work for you! 43. Then you can sit back and watch your dividend paychecks start rolling in! 44. For more free information on Dividend Stocks go 45. More from Dividend Stocks ResearchFollow Us On Social Media 46. What You MUST Do to Never Run Out of MONEY in Retirement! Get it FREE!CLICK HEREREAD THISFREEREPORT!

Search related