How You Can Profit From High Dividend Stocks

by Alan McKnight Article Writer Whenever you buy stocks from a business or company, you become a partial owner of that company. Stocks bought from a company could either be of the growth or dividend type. Find out in this article what you need to know about making a profit from high dividend stocks.

Whenever you buy stocks from a business or company, you become a partial owner of that company. Stocks bought from a company could either be of the growth or dividend type.

Those of the growth type are the most commonly issued, as most companies do not pay dividends to their stockholders. The companies that pay stock dividends are those that have additional profit after reinvesting into their business to then be able to share with the company's stockholders. These types of organizations are often considered by many investors to be more stable.

Dividend payments represent a part of the company's profit issued to its stockholders in the form of cash. You, as an investor, might like to have a source of continuous income from your investments as well as the opportunity to see them appreciate in value.

In that case, investing in high-dividend paying stocks would be a good move to make. This way, you can enjoy a current flow of cash from your stock portfolio added to the main benefit of its appreciation.

A company typically determines the amount of dividends that it will be paying out during each period. The amount is not constant and may be raised or lowered at any time based on the decisions made by the Board of Directors; it is also typically paid every quarter.

This is one main reason why you should do thorough research before you invest into a paying dividend stock, and make sure that it is stable and profitable, as dividend payments can be changed over time. The yield can be calculated via a formula that divides the dividends by the stock's current price.

How to Find High Dividend Paying Stocks
The first thing you would need to do is to visit a website like Marketinout.com for access to a free stock screener tool. What this tool does is that it helps you to filter the enormous number of stocks available for sale and get results based on the exact criteria that you specify.

Using the stock screener, determine the criteria that you would need for this particular search. In this case of searching for high dividend stocks, you would only put in your preferred dividend yield as well as the stock's market capitalization. As stated earlier, the dividend yield refers to the stock's dividend amount divided by its share price.

Generally, a yield at 5% or more is considered to be quite profitable. You should also search according to the issuing company's market capitalization as the higher it is, the more financially stable and profitable the company is likely to be.
 
These are certainly factors that you want to be aware of when purchasing. A good market capitalization value to search with would be about $1 billion.

Once you have the results from the selected values, you should then go on to further filter the stocks and determine which ones offer the best value for your money. Criteria such as recent price behavior, earnings per share (EPS), and return on equity (ROE) are a good place to begin with this.

Finally, remember to do as extensive a search as possible to reduces the investment, as every investment will always represent a financial risk. Why not visit Marketinout.com for further help and resources with investing in high dividend stocks and paying dividends stocks for investment success.

Sponsor Ads

• Ad Space Available - Rent it Now!

Created on Dec 31st 1969 18:00. Viewed 0 times.

Comments