Invest in Dividend Stocks
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Transcript of Invest in Dividend Stocks
Invest in dividend stocks for security and a steady
income.
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There are companies that have routinely paid quarterly dividends for as much as a
century.
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If you want to sleep at night invest in dividend stocks. A contrarian might argue
that buy investing in a secure stock that you will give up the potential for
growth. www.ProfitableInvestingTips.com
However, good dividend stocks typically outperform
the Standard and Poor’s 500 stock index over a decade.
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A company that makes money oftentimes pays a portion of its profits to
shareholders on a quarterly basis.
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Sometimes this dividend is a onetime payment based on exceptional circumstances.
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However, when we suggest that you invest in dividend stocks we are talking about
companies that send a shareholder a check every
fiscal quarter.
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Dividends from a strong company are a reliable
source of cash. They are also proof of the
strength of the company and should be considered when doing fundamental analysis
of a stock. www.ProfitableInvestingTips.com
In some ways dividends are like interest from bonds. A secure company will pay a set dividend that does not
change with prevailing interest rates.
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Thus the price of the stock may go up with lower
interest rates and down with higher rates.
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High Dividends of Consistent Dividends
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The general reason to invest in dividend stocks is long term, consistent dividends.
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This is what helps you sleep at night as a stock investor.
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The higher the dividend the better but if a company is
stealing from R&D capital to pay dividends it might just
be getting a little too desperate to keep its share
price up.
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For long term reliable dividends companies like
Colgate, Clorox and Proctor and Gamble come to mind.
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These reliable consumer products companies keep making money
year in and year out.
If you do not want to wake up some morning to find that your stock portfolio has evaporated invest in dividend stocks like
these. www.ProfitableInvestingTips.com
Other sources of reliable and healthy dividends are utility
companies.
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Finding Good Dividend Stocks
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Running a stock screen is a good way to find companies
that pay dividends.
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If you require a certain percentage dividend return set the stock screen to show only stocks that make the
cut.
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Look at how long the company has been paying
dividends and check to see if there are gaps in their
payment record.
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Long the way look at the general margin of safety of
the company and its intrinsic stock value.
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You can always profit by using fundamental analysis.
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Well managed companies with strong profits and
competent cost containment typically pay good dividends and are good investments for
the long term.
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For a well balanced stock portfolio, investors
commonly invest in dividend stocks as part, growth stocks as part, and invest in a mix of market sectors as well.
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Remember that dividend stocks commonly increase in value during a down market.
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As such it can be possible to buy these in anticipation of a recession and sell when they move contrary to the market.
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