Dividend Stocks ( General Discussions )

[winston]

Four Key Characteristics To Look For In Dividend Stocks

There is a lot of talk about great dividend stocks to purchase for the long-term.

But, how do you weed out the great dividend paying stocks from the hundreds of good or mediocre ones?

There are a few key metrics that dividend investors need to consider before purchasing their first share.

Here are a few of the biggest metrics to consider.

http://www.thediv-net.com/2012/08/four- ... or-in.html

[winston]

5 Sell Signals for Dividend Stocks

#1 High Dividend Payout Ratio

#2 No Dividend Increase

#3 Earnings Per Share (EPS) Decrease

#4 Profit Margin Decrease

#5 Dividend Cut

http://www.dividendstockanalysis.com/5- ... nd-stocks/

[winston]

Why Aren’t All Income Investors Doing This?
Author: Street Authority

If you follow the popular investing media, then you’ve likely heard a lot about the benefits ofdiversification in a stock portfolio…

One or two losers in a basket of stocks won’t significantly drag down the overall performance; you’ll sleep better at night knowing your portfolio won’t need to be watched around the clock, and the overall returns will likely keep pace with — or beat — the overall market.

But if you’re an income investor, then maybe you think the advantages that diversification can offersomehow don’t apply. After all, most investment advisors lump all income assets into the same class.

However, you can have a more diversified income portfolio while reaping all those same benefits.

First, consider the choices. Income equities fall into three broad categories:
■ Dividend payers that grow their payouts at a fast clip.
■ Dividend payers that offer higher yields (but may be riskier).
■ Dividend payers that deliver a dependable, yet smaller, income stream.

Then, consider the mix.

http://www.yolohub.com/trading/why-aren ... doing-this

[winston]

The most challenging aspect of dividend investing

Many dividend investors focus exclusively on finding the best dividend stocks.

They spend countless hours analyzing companies, studying balance sheets and perfecting their entry criteria.

Yet, when the companies that have taken so painstakingly to identify and research appreciate in price, investors decide to cash in and move onto the next idea.

Unfortunately in most situations, investors end up worse off in the new idea, in comparison to just sitting tight and doing nothing.

http://www.dividendgrowthinvestor.com/2 ... idend.html

[winston]

Dividends Don't Lie By Sham Gad

Instead of telling you what you already know, that dividends create tremendous value over the long run, I'll simply lay out the numbers, which are more powerful.

The true value of dividends can be explained via a simple math problem.

Consider the two scenarios:

http://www.thestreet.com/story/11732048 ... L_ttt_html

[winston]

How to be a Dividend Winner

People who are winners tend to concentrate on setting a goal and creating actionable steps in order to achieve that goal. Losers are people who look for excuses for their failures and blame others for their own lack of common sense.

In order to be a dividend winner, an investor needs to set a clear goal of target monthly income, the timeline to achieve this goal and the steps to make it happen.


The first step in dividend investing is very simple – create a goal. The goal of many dividend investors is to be able to generate a sufficient stream of dividend income to live off of. Let’s assume that a dividend investor needs $1000/month in distribution income in ten years.


The second step is a little more complicated – creating an action plan to realize the goal. The action plan should spell out how exactly to achieve the target monthly income. This would include the specific strategy that the investor would use, the amount of money they need to save and then stress test their expectations on how the income stream might perform over time.


The third step involves accumulating a sum of money in order to start investing.

The fourth step is creating and utilizing a strategy in order to select the best dividend stocks. This strategy should spell out the entry criteria for the group of stocks, when to sell and how to structure your portfolio.

I focus on dividend growth stocks which have raised distributions for over a decade, which have strong competitive advantages, can grow earnings and have a sustainable dividend payout.


The fifth step involves managing the portfolio of stocks in order to achieve the target return. This involves having proper diversification by having exposure to as many sectors as possible, without sacrificing quality.

Investing in dying businesses such as newspaper companies for diversification purposes is not advised. Investing in quality companies from as many sectors as possible that meet the qualitative and quantitative criteria above however should be the goal.

http://www.dividendgrowthinvestor.com/2 ... inner.html

[winston]

5 Things I Learned About Dividends From PIMCO

Brad Kinkelaar's presentation was a rundown of dividend-related intelligence from the PIMCO team and I came away with a handful of new insights I wanted to share with you below. Here are five things I learned:

1. Kinkelaar makes a very important point about how, during some decade-long stretches, the income from dividends is really all an equity investor has.

2. It's important to understand that it's not the very highest payers you want - many high-yielding stocks got there the hard way through share price declines. It's really the 8th decile of payers that puts you in the sweet spot for total returns. Nominal yields alone are not the story.

3. Also, it's not just high dividend payers that you should be looking for, it's companies that are growing their dividends at high rates that really amp up performance.

4. Foreign companies that are growing are also paying good dividends, there's no stigma about paying shareholders today and over the long-term in capital appreciation like we have here.

5. They find better value in EM and European telecom stocks like Vodafone, for example.

So my takeaways are not to focus just on the nominal dividend yield percentage but on the possibilities for total return given valuation.

http://www.thereformedbroker.com/2012/1 ... rom-pimco/

[winston]

Are High Yield Stocks in Bubble Territory ? by Cullen Roche

Good read here from Alliance Bernstein on high yield stocks:

“Investors have been flocking to high-dividend-paying stocks, lured by their predictable, bondlike income and downside defenses. But investors may be getting more risk than they bargained for.

The widespread pursuit of safety in high-yielding stocks has driven up their valuations and increased market concentration in these stocks. It has also caused an alarming surge in their correlation to bonds, so investors may be getting a lot less diversification than they realize.

Let’s look at valuations first. High-yield stocks are as pricey as they’ve been since the early 1950s, trading at a modest premium to the market versus a long-term average discount of 20%.

We don’t view this premium as exorbitant given the current market anxieties, but it does limit upside potential and makes these stocks more vulnerable than others if sentiment turns.

Most of the high-priced dividend-paying stocks are in mature, slow-growth sectors such as consumer staples, telecom and utilities, which are likely to look less appealing than more economically sensitive stocks in a sustained economic recovery.”

http://pragcap.com/read-of-the-day-are- ... -territory

[winston]

2 Quick Ways to Get an Idea of a Companies Valuation By Dan Mac

Compare the Current P/E Ratio to Historical Ratios

Comparing the Earnings Yield to Long Term Treasury Rates

Conclusion

These are the two ways I’ll do a quick valuation of whether I think a stock is fair, under or over valued.

Usually I rely more on the P/E ratios rather than earnings yield but I think both can be valuable to pay attention to.

It is important to remember that this is just the first step in the investing process. Next it is important to do a complete analysis and estimation of future returns before actually making the investment.

Just because a stock is trading with the lowest P/E or the highest earnings yield does not mean it is the best investment to make.

Check the news on the company. Look over the financial data. There may be a reason why the market is valuing that company lower than other companies in the stock market.

http://www.dividendgrowthstockinvesting ... valuation/

[winston]

Free Cash Flow Payout vs. Dividend Payout

I am a firm believer in keeping things simple. However, you can simplify things to the point they no longer have value.

In my opinion, a lot of the commonly used financial metrics can be very misleading unless you understand what is behind them.

I would put EBIT, EBITDA and Dividend Payout in this category.

As an investor in dividend growth stocks, I see Dividend Payout used a lot, so let's take a closer look at it.

http://www.dividend-growth-stocks.com/2 ... ayout.html