Dividend Investing

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SeekingAlpha  Oct 18  Comment 
By Stock Gamer: The share price of ConocoPhillips (NYSE:COP) has plunged by almost 20% over the past 12 months largely due to oil price weakness. From a dividend perspective, I believe the price of $68 represents a very appealing entry point for...
SeekingAlpha  Oct 17  Comment 
By AdvisorShares: By: Tim Gramatovich, CFA, CIO and Heather Rupp, CFA, Director of Research for Peritus Asset Management, the sub-advisory firm of the AdvisorShares Peritus High Yield ETF (NYSEARCA:HYLD) Here are some of the reasons we...
newratings.com  Oct 17  Comment 
To:                   THOMSON REUTERS From:               New City High Yield Fund Limited Date:                17 October 2014 Net Asset Value The unaudited net asset value (NAV) of the Company...
SeekingAlpha  Oct 16  Comment 
By Rising Dividend Investing: Europe’s economy is in a funk and may be heading for recession. Terrorists in the Middle East have burst onto the scene straight out of some B movie horror show. The Ebola crisis threatens to reap vengeance near and...
SeekingAlpha  Oct 16  Comment 
By Andrew Sachais: The spread on high yield credit over the risk-free rate has expanded as weaker economic data pushes money out of riskier assets and into lower beta assets. iShares iBoxx $ High Yield Corporate Bond (NYSEARCA:HYG) is down nearly...
newratings.com  Oct 16  Comment 
To:                   THOMSON REUTERS From:               New City High Yield Fund Limited Date:                16 October 2014 Net Asset Value The unaudited net asset value (NAV) of the Company...
newratings.com  Oct 15  Comment 
To:                   THOMSON REUTERS From:               New City High Yield Fund Limited Date:                15 October 2014 Net Asset Value The unaudited net asset value (NAV) of the Company...
SeekingAlpha  Oct 14  Comment 
By Stock Gamer: Share price performance of KRAFT Foods (NASDAQ:KRFT) has been very bumpy since July. The price experienced a large pullback in late July. Despite a partial recovery in August, it slid back to $55 level in September. From a dividend...
newratings.com  Oct 13  Comment 
To:                   THOMSON REUTERS From:               New City High Yield Fund Limited Date:                13 October 2014 Net Asset Value The unaudited net asset value (NAV) of the Company...
newratings.com  Oct 9  Comment 
WASHINGTON (dpa-AFX) - Finishing off this week's series of long-term securities auctions, the Treasury Department sold $13 billion worth of thirty-year bonds on Thursday. The thirty-year bond auction drew a high yield of 3.074 percent and...




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Overview

Dividend investing focuses on selecting solid companies that pay a regular and growing dividend. Investing for dividends in the U.S. has been gaining in popularity since The Jobs and Growth Tax Relief Reconciliation Act of 2003 created qualified dividends, which are taxable at a 15% federal rate or 5% for taxpayers in the two lowest tax brackets. Many other countries, such as Canada, have preferencial income tax treatment for dividends earned.

As noted in the article Seven Important Reasons for Dividend Investing , stocks that pay dividends provide several advantages over those that do not, including:

  1. Dividends provides stability to your investment
  2. Dividends can't be manipulated or faked
  3. Dividends provide continuous feedback
  4. Reinvested dividends provided a significant portion of the historical equity returns
  5. Good dividend companies grow their dividends
  6. Spending dividends in retirement, does not harm your principle investment
  7. A dividend portfolio is relatively low maintenance

However, as with any investment, there are some cons as well. These include:

  1. Dividend payments are not consistent. They can change and should not be relied on as a guaranteed paycheck. If a company becomes less profitable, payments may decrease or be suspended altogether.
  2. Payments are still subjected to income tax.
  3. At the end of the day, dividend stocks may not yield as much profit to investors as common stock investors.
  4. When the yields rise in the market for other shares, stock prices may go down as companies compete for investors.

References

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