5 top tips for successful dividend stock investing

high dividend investments

Successful dividend stock investing can be a major source of growth for your portfolio.

Dividends are in fashion with investors right now, and that’s always a good thing. After all, creative accounting can produce false impressions of prosperity and hide embarrassing financial problems. But accounting can’t create cash for this year’s dividend, let alone conjure up a history of past dividends. Stick to dividend payers and you’ll avoid most of the market’s greatest disasters.

Here are five tips for the best results in dividend stock investing.

The difference is dividends

The best dividend stocks will turn an average portfolio into a strong, fast-growing one. Pat McKeough has spent years showing investors how to convert high-quality dividend stocks into greater earning power. Now he shows you how to make it work for you in his complete guide to dividend investing. Get his free report now.


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Dividend stock investing tip: Add U.S. dividend stocks to your portfolio

The best U.S. dividend stocks can be a valuable component of any investment portfolio. These stocks provide a consistent dividend yield year after year. That’s key to your long-term investment success, because dividends overall can contribute as much as a third of your total return.

Above all, for a true measure of stability, focus on stocks that have maintained or raised their dividends during economic or stock-market downturns. That’s because these firms leave themselves enough room to handle periods of earnings volatility. By continually rewarding investors, and retaining enough cash to finance their businesses, they also provide an attractive mix of safety, income and growth.

Discover additional ways to add U.S. dividend stocks to your portfolio.

Dividend stock investing tip: Add TSX dividend stocks to your portfolio

At TSI Network we think investing in TSX dividend stocks is one of the best investment decisions you can make.

A long history of dividend payments is one thing that the best TSX dividend stocks all have in common. These payouts are drawn from earnings and cash flow and paid to the shareholders of the company. Typically, these dividends are paid quarterly, although they may be paid annually or monthly as well.

Learn 15 additional tips for investing in TSX dividend stocks.

Dividend stock investing reference: The highest dividend yield stocks can harbour hidden dangers

The dividend yield is an indicator we pay especially close attention to when we select stocks to recommend in our investment newsletters.

The highest yield dividend stocks may be attractive, but they can also be misleading. An attractive yield, and especially a very high dividend yield, can give you a false sense of security. That’s because many investors have a tendency to think that all investment income is almost as safe and predictable as bank interest.

Discover how to tell a reliable dividend yield from misleading dividend yields that are extremely high.

Dividend stock investing tip: Add dividend-paying blue chip stocks to your portfolio

Top dividend-paying blue chip stocks should be a focal point of successful investing.

When the market is volatile, it pays to keep the mechanics of successful investing in mind. We advise investors to look for blue chip companies that are likely to pay off if business and the stock market are good, but that won’t hurt investors too much during those inevitable periods when business or the markets are bad. In a deep or long-lasting market setback, your blue chip stocks will tend to go down, along with everybody else’s. But we think they will go down less and recover sooner.

Learn more about the reasons for adding dividend-paying blue chip stocks to your portfolio.

Dividend stock investing tip: Dividend tax credits can help increase returns for Canadian investors

Canadian taxpayers who hold Canadian dividend stocks get a special bonus. Their dividends can be eligible for the dividend tax credit in Canada. This dividend tax credit—which is available on dividends paid on Canadian stocks held outside of an RRSP, RRIF or TFSA—will cut your effective tax rate.

This means that dividend income will be taxed at a lower rate than the same amount of interest income. Investors in the highest tax bracket pay tax of around 29% on dividends, compared to 50% on interest income. At the same time, investors in the highest tax bracket pay tax on capital gains at a rate of about 25%.

Read more about the bonuses of dividend tax credits for Canadian investors.

Dividend stocks are popular among investors. Due to this popularity, do you think there will be a dividend bubble that will burst, like we’ve seen in other investments in the past?

Most dividend paying stocks have several appealing features. What feature makes a dividend stock a good fit for your portfolio?


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