Dividend stocks have remained one of the most reliable ways to collect steady income from the stock market. Many companies pay out dividends quarterly, which makes it an attractive income source, but there are also companies that pay monthly or annual dividends.
The best dividend paying stocks increase their dividend payouts as the company grows and profits increase. Investing in high-dividend stocks can be a consistent form of passive income that can prepare you for a comfortable future.
Ready to take advantage of the unique investment opportunity that dividend stocks present? Keep reading to learn how they work and how to maximize your profits, then check out our collection of articles and resources below to learn about the latest in dividend stocks.
A publicly-traded company pays out dividends to shareholders after its board of directors meets to decide whether the company has made enough profit to warrant payment. The amount of total dividend payments compared to the company’s net income is known as the payment ratio.
Companies that pay out dividends can do so in two ways:
• Cash dividends are regular cash payments to shareholders. The company agrees to pay a percentage of profits in cash to investors. How much each shareholder receives is based on the number of shares they own. For example, if you own 100 shares in Company X and they pay $8 per share, you’ll receive $800 in addition to whatever profits you’ve made off of rising share prices.
• Stock dividends are similar to cash dividends, but they pay shareholders in additional shares in the company. For example, if Company X chooses to pay an 8% stock dividend and you own 100 shares in the company, you will have 108 shares after the payout.
As stated above, dividend payments vary by company. Whether a company chooses to pay cash or stock dividends, payouts are still done monthly, quarterly, or annually, depending on what the board of directors chooses.
Although not all companies pay dividends, some of the biggest and most profitable companies in the world do offer dividends—providing a bonus for investing in certain blue-chip stocks. In fact, some of the best high dividend stocks are household names such as Qualcomm Inc. (NASDAQ: QCOM), International Business Machines Corporation (NYSE; IBM) and Target (NYSE; TGT).
Blackstone Group
Private equity and alternative asset manager Blackstone Group Inc. (NYSE: BX) is one of our favorite dividend-paying stocks to own. Plus, the company has real growth potential, unlike a lot of high-dividend stocks you'll find. Analysts are projecting 34% growth this year and more than 15% a year increases on average for the next five years.
The current dividend yield is 3.04%. That might not be an eye-popping number, but it's double the average S&P 500 dividend.
Even better, many dividend stocks only boast high yields because the share price is beaten into the ground. In those situations, the dividend may not be stable. That's not the case for Blackstone. The stock is healthy, and its high yield is by design.
Blackstone's dividend policy is to pay out about 85% of its distributable earnings every quarter. When the company does better, your dividend can go higher.
Blackstone is not just a private equity firm. It is also one of the largest owners of commercial real estate in the world today. On top of that, it invests in direct lending markets that help finance small and middle-market companies.
The high returns from Blackstone's private equity and real estate funds have driven returns for many local governments, foundations, and educational endowment portfolios over the last four decades.
We already have a considerable pension shortfall in this country. Without the returns from Blackstone's funds, it would be worse.
With interest rates staying low for at least the next several years, both individual and institutional investors will continue to look toward Blackstone for solutions.
Blackstone President Jon Gray recently said that with an eye on the future, the firm has been orienting its investments toward faster-growing areas, such as life sciences and those connected to the digital economy, including global logistics, digital payments, and enterprise software.
As one of the largest warehouses and industrial real estate owners, it's already a huge player in the supply chain and e-commerce markets.
Dividend and Income Fund Inc.
This is an opportunity you're not likely to find anywhere else.
The Dividend and Income Fund Inc. (OTCMKTS: DNIF) is a closed-end fund that owns a portfolio of stocks and bonds and looks to pay out steady income to its investors. The fund has a managed distribution plan that pays out a fixed amount every quarter to its investors.
The fund has a solid portfolio of stocks that makes this possible. The top holdings are familiar companies like Intel Corp. (NASDAQ: INTC), Comcast Corp. (NASDAQ: CMCSA), T. Rowe Price Group Inc. (NASDAQ: TROW), and Williams-Sonoma Inc. (NYSE: WSM).
About 8% of the fund is invested in bank stocks right now, which is fantastic as banks are seeing massive tailwinds from a recovering economy and rising long-term rates.
Dividend and Income Fund also owns some bonds, preferred stocks, and energy master limited partnerships (MLPs) that help increase the income available to pay out to shareholders.
That's what you like to see in a dividend fund like this one.
The fund is paying out $1 a year in dividends. At today's price, that's a yield of about 8%. That yield is very hard to find in today's market, especially when you're not looking for distressed stocks or gimmicks.
But there's an even better reason for buying into this fund: Its share price can grow higher. You see, big institutional investors are mad at the fund manager, which means you can own it for an incredible discount.
The fund manager, Thomas Winmill, is one of the least shareholder-friendly fund managers of all time. He passed several different anti-takeover provisions that keep the fund from coming under pressure from activist shareholders.
He even has a provision that says that no one can own more than 4.9% of the fund without the board's approval.
So far, only the securities and investment firm of which Mr. Winmill is the chair, Bexil Corp. (OTCMKTS: BXCL), has received permission to own more than 4.9% of the fund.
If you're an investment bank or hedge fund, you don't like being locked out of control. If you're an individual investor like us, you don't care.
The fund currently trades at a mind-boggling discount of about 31% from its net asset value (NAV).
We are paying less than $0.70 on the dollar for a high-quality portfolio of dividend-paying stocks and income securities. This is unheard of in today's climate.
What we are going to do is buy shares of this fund at this massive discount to NAV and wait.
There has been talk of a lawsuit to force Winmill to remove some of the unfriendly provisions and allow investors to own a larger stake.
There is also a suit filed on Jan. 14, 2021, in the District Court for the Southern District of New York challenging the legality of so-called "control share" limitations on voting by shareholders.
There are hungry activists swirling around this fund, just waiting for any change of the ownership restrictions.
Even if the lawsuits fail at some point, Winmill and Bexil will want to monetize their position in the fund. The only way to that will be to turn Dividend and Income into an open-end fund or liquidate the fund and give the money back to shareholders.
We can collect around 8% in yields with the potential for a 40% pop in share price.
Let the institutions worry about corporate governance. Winmill has put together a good portfolio of stocks, and you can collect a high stream of income from that portfolio.
Something will eventually happen to eliminate or reduce the discount giving us pop in share price.
Until then, we will just get paid a higher yield than even junk bonds can offer right now.
Dividend investing can be an excellent way of generating passive income. The more shares of dividend stocks you own, the more money can be made.
To successfully earn an income with dividend stocks, there are a few indicators to look for when deciding which company to invest in:
• Growth of the company’s income, which could be an indicator of increasing dividends.
• The dividend yield or payment ratio a company offers at the time of stock purchase.
• The company’s balance sheet which indicates whether the company is profitable or has a lot of debt to overcome.
If you’re looking to make a profit investing in dividend stocks, there are two ways to do it:
• Long-term Dividend Investing
Investing in companies that pay dividends and holding them for many years allows investors to continue to share in the company’s profits as it grows. Holding on to shares means that the shareholder receives a steady source of income as long as he or she maintains ownership. Reinvesting cash dividends or keeping stock dividends gives the investor greater ownership of the company.
• Short-term dividend investing
Some investors choose to buy a stock to receive dividends and sell shortly after payout. However, when stocks are held for less than a year, they are classified as short-term and can be subject to different taxation than long-term investments.
The amount of tax paid on dividend stocks depends on whether the investment is long-term or short-term. This goes for any stock you buy and sell, not just dividend stocks.
Short-term capital gains (earnings on shares held less than one year) are taxed as regular income.
On the other hand, long-term capital gains (earnings on shares held longer than one year) are only taxed based on net capital gains over the year. Net capital gains are determined by subtracting annual capital losses from annual capital gains.
Depending on your net capital gains, you could owe between 0% and 20% in federal income tax.
Dividend stocks could be your solution to making steady, passive income that sets you up for a comfortable, secure future.
Don’t forget to check out Money Morning’s resources to help you successfully invest in income stocks and keep checking back to the most important investing advice from our experts.
Lots of investors love to own "dividend stocks" like TLT and PTTRX for the seemingly high yield; they're hugely popular.
But, if you look closer, you'll see that yield comes at the cost of share price performance.
That "high yield" can drag your whole portfolio down.
Chris Johnson's used his screener to find 15 of the safest dividend performers out there, plus one you must own.
Lots of investors love to own "dividend stocks" like TLT and PTTRX for the seemingly high yield; they're hugely popular.
But, if you look closer, you'll see that yield comes at the cost of share price performance.
That "high yield" can drag your whole portfolio down.
Chris Johnson's used his screener to find 15 of the safest dividend performers out there, plus one you must own.
High-yield dividend stocks offer investors refuge in volatile markets like this one.
Stocks are near record highs, while inflation fears and a sputtering economy threaten to wipe out these gains.
Adding a dividend paying stock to your portfolio can help minimize the risk.
The trouble is, they’re harder than ever to find.
At Money Morning we’ve done the in-depth research to find dividend stocks paying healthy yields.
And the strategy we've uncovered is the perfect solution for any income-seeking investor...
There are two essential ways to make life-changing wealth from a stock.
You can profit in the long term as the company grows its bottom line and the stock price goes up.
Or you can get that profit delivered right to your hand in the form of a quarterly check.
These are the best versions of growth and dividend investing.
Many people think you have to choose whether to invest in growth or dividend stocks.
But that's a common "all-or-nothing" fallacy...
The search for income will not be any easier in 2021 than it was for most of 2020.
The U.S.
Federal Reserve has vowed to keep rates low to support the economy as we deal with the pandemic's economic fallout.
We can tell this from the Fed's projection at its August meeting.
It doesn't look like we will see meaningful action towards higher interest rates until 2024 at the earliest.
But the best dividend stocks are still paying more than 7%. We're sharing them with you today.
Stocks just do not seem to have an off switch as we approach the end of the year.
The anticipation of a vaccine is continuing to give investors the confidence to pour money into stocks.
Bonds have drifted back a little, but not enough go for yields be meaningful enough.
This particular combination can make life difficult for income-seeking investors.
The pool of high dividend stocks has been shrinking, and traditional fixed-income investments have paltry yields at best.
Investors with new money to put to work in income producing ideas face a real dilemma right now.
Fortunately, there are alternatives to traditional stock and bonds that can provide the high yields needed to fulfill your income needs... Here's what I mean, including the best dividend stocks to buy now...
The almost-continuous stream of good news about a COVID-19 vaccine finally revived community and regional bank stocks in November.
The SPDR S&P Regional Banking ETF (NYSE Arca: KRE) bounced back more than 25% in November after being down more than 50% at its lowest point.
The index is still down 15% year to date, but it has been an impressive recovery.
It may continue to go in that direction, which will fuel some of the best bank stocks we’re covering today.
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It was already hard to find income-producing investments.
Now, thanks to the recent vaccine-inspired rally in stocks, it is harder than ever.
The best high dividend stocks for 2021 have been called.
This is an opportunity to collect yields higher than 10%.
Dividend stocks in 2020 faced slashing interest rates, a global pandemic, a noisy presidential election, market crash and recovery.
But if we look at the sectors that were the most battered by the pandemic and will benefit the most from a vaccine, we can expose some key income opportunities for the next year.
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Fears of a renewed spread of the coronavirus and the lack of progress on a second stimulus package have kept a lid on stocks.
Value investors are finding few deals worth pursuing while growth investors see no momentum higher.
But the best high dividend stocks offer a bit of both worlds thanks to their steady income streams and chronic underpricing.
We're specifically targeting a special class of dividend stocks too.
These aren't just stocks with high yields, their business models are designed to pay shareholders.
Low interest rates have propelled stocks to soaring heights despite the recession caused by the coronavirus.
That means it’s both hard to find growth opportunity and yields in this market.
Hard, but not impossible.
I’ve scoured the markets to find the best high-yield dividend stocks that can add income to your portfolio right away.
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Investing for income is difficult today and probably going to get a lot tougher over the next three years... Wall Street will throw all kinds of crazy ideas at you that will allegedly raise your income level.
These products will raise someone's income level, but I suspect it will not be yours.
Millions of Americans will be looking for income as rates stay lower longer than anyone had thought possible.
In a recent press conference Federal Reserve Chairman, Jerome Powell, has said that rates will remain low until at least 2023, if not longer.
Inevitably, income-producing assets will be become bid up to excessive valuations.
Income investing will be difficult and frustrating beyond belief for most investors.
But there is hope if you follow the simple rules I'm going to outline for you today...
Now that football is back, I'm reminded that defense wins championships.
When we see broad market selloffs, the best strategy is typically to take a look at tried-and-true dividend investing.
Today, I'll show you some of the best dividend stocks to buy.
One of them has an 8% yield.
The tech sell-off dragged down all major stock indices over the last week.
The Nasdaq dipped into correction territory on Tuesday.That came as a sudden reminder that we are not out of the economic crisis caused by the coronavirus and the runup since March has happened in spite of the negative news.
Investors might be tempted to buy the dip, but the risks are far from over.
That's why adding high dividend stocks to your portfolio right now can give you some much needed stability and income as volatility rises through the fall.
Most of us are probably familiar with the concept of dividend growth investing.
Dividend investing approach seeks companies that are growing their dividend payout year in and year out.
That growing cash payout tells us that the company is generating cash flow in excess of business needs.
The ever-increasing dividend also tells us that the company is selling more products and making more money than ever before.
Right now, we're going to show you possibly the best high-yield dividend stocks today.
It sticks out in an environment where reliable dividends can be hard to find.
We still don't know what the real impact of the COVID-19 pandemic will be on the U.S.
economy.
But there are still dividends to be earned out there.
Here you will find two of the best high-yield stocks to buy in September.
