Dividend Stocks

Discussion in 'Stocks' started by yonisin, Jul 22, 2009.

  1. yonisin


    I have a day trading account, but I'm researching dividend stocks for income should I ever be able to retire. Can anyone suggest a site, or a list of stocks?


  2. I suspect that lists of high yielding stocks will give you a list of stocks which will soon cut their div, e.g. banks.

    Might be better to follow "bottoms-up" guys. I'm no fan of Buffett, but am long JNJ (Buffet sold recently), and I am long, but covered writes on HSY. Buffett recently bot Mars Candy. I bot HSY before that. But its the same type of stock.

    My feeling about div payers (I'm certainly no expert), find leaders in their industry, diversified as much as they can, and insulated from all the morons who grab the headlines every morning.

    In spite of last year's crash, the divs for both of these stocks let me ride them out.
  3. The trick is not to get lured in by the high dividend yield. 2% stock today can easily be a 6% in 4 years. Having said that AT&T and Verizon's 6%+ yield is hard to pass up along with few tobacco companies like PM, BTI, MO, RAI and LO.

    World class stocks are a good base to start out with. KO, AXP, CAT, MCD, and the likes.

    Canadian banks are a good place to look for some sweet divs. BNS, BMO, TD, and CM.

    I went all in on good dividend stocks at the market bottom last year. I calculated the whole portfolio and I got an average div of about 4.2 using buying some of the stocks listed above. Could have been 5%+ if I hadn't bought so much Microsoft.

    There's bunch of legitimate lists out there like the dividend achievers and dividend aristocrats but I never really bothered with them.
  4. Nanook


  5. drbtk


    You might also want to look at MLP's, Royalty Trusts, REITS, and preferred stocks for higher yields (with corresponding risk of course).
  6. drcha


    I have looked pretty hard for a site like this but have not found a site devoted to it that is free or inexpensive and that is not flipping people in and out of stuff all the time.

    I have a few suggestions:

    Vectorvest.com is about $50/month. They give each dividend a safety rating from 0 to 100. They also provide information about dividend growth and dividend yield, as well as a lot of other stuff. You can sort the 8000 stocks they follow by any of those parameters. This site is well worth it for stock picking and market timing. You can try it out for a month for a small fee--I think $20.

    The S&P and Mergent's lists of dividend achievers are also a really good place to start. They are free but what they don't provide is a dividend safety rating.

    Whatever you do, do not rely on Morningstar for this type of information. While they may be a good source for fund information, my opinion is that they do a really crappy job of stock picking and that they are completely useless when trying to evaluate whether a dividend is safe.

    I read a book on utility stock investing one time (don't recall what the book was) that suggested this method: Choose stocks that have been increasing their dividend. Calculate the percent dividend increase (from same quarter of last year) each time a new dividend is announced. If the company is not increasing their dividend at the same rate or a higher rate as the previous year, dump the stock and find a new one. This is an extremely conservative approach that should get you out of any bad issues early. It will work well for many equities, but is not a very good method for REITs and MLPs, whose distributions necessarily vary. And I think it is good to hold some of those, since they do not necessarily correlate with the stock markets.

    As long as you are going to be sitting on dividend stocks long term, you might want to consider selling some calls against them to get more income. You don't have to let the stock get called away completely; you can just sell calls against part of your shares if you like. If you do this, for diversification, it is best to sell them at different times and with different times to expiration.

    In addition to equities, there are numerous ETFs that pay a decent dividend, including some of the currency, commodity, real estate and foreign stock ETFs. That should get you some diversification, since all value stocks tend to tank at the same time.

    Good luck. Here are my current favorites: