dividend
A dividend is a cash payout that serves as a way for companies to share the profits they’ve accumulated through their operations. These payouts are drawn from earnings and cash flow paid to the shareholders of the company. Commonly these dividends are paid quarterly, although they may also be paid annually or even monthly as well. A dividend can produce as much as a quarter of your total return over long periods. Some good companies reinvest profits instead of paying a dividend. But fraudulent and failing companies hardly ever pay a dividend. So if you only buy stocks that pay dividends, you’ll automatically stay out of almost all the market’s worst stocks. For a true measure of stability, focus on companies that have maintained or raised their dividends during recessions and stock market downturns. 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 provide an attractive mix of safety, income and growth. Dividends are an important contributor to your long-term gains, and dividend-paying stocks tend to expose you to less risk than non-dividend-payers. That’s why the majority of your stocks should be dividend-payers at all times. As you get older and closer to retirement, you should raise the proportion of dividend-paying stocks in your portfolio, to cut risk and improve the stability of your investment results. To maximize your investment returns with the least risk, follow TSI Network and use our three-part Successful Investor strategy:
- Invest mainly in well-established companies;
- Spread your money out across most if not all of the five main economic sectors (Manufacturing & Industry; Resources & Commodities; Consumer; Finance; Utilities);
- Downplay or avoid stocks in the broker/media limelight.
Discover how to put an extra strength in your portfolio with our specific advice on how to identify high-quality dividend stocks. It’s all in our newly updated report, Dividend Paying Stocks: How High Dividend Stocks Can Supercharge Your Income Investing. And it’s yours FREE!
INTERNATIONAL BUSINESS MACHINES CORP. $123 is a buy. The company (New York symbol IBM, Conservative-Growth Payer Portfolio, Manufacturing & Industry sector; Shares outstanding: 896.3 million; Market cap: $110.2 billion; Dividend yield: 5.4%; Dividend Sustainability Rating: Above Average; www.ibm.com) is one of the world’s largest computer companies, with operations in over 175 countries.
IBM has raised its dividend for 27 consecutive years and has paid quarterly dividends every year since 1916....
CHOICE PROPERTIES REIT $13 is a buy. Canada’s biggest REIT (Toronto symbol CHP.UN; Cyclical-Growth Payer Portfolio; Manufacturing & Industry sector; Units outstanding: 723.5 million; Market cap: $9.4 billion; Distribution yield: 5.7%; Dividend Sustainability Rating: Above Average; www.choicereit.ca) owns 701 retail, industrial, office space and residential properties....
Preferred shares offer similar security to bonds, but can also provide investors a better after-tax yield. In addition, they rank ahead of common shares in the payment of dividends and in claims on the company’s assets.
Preferreds, however, are a fixed-return investment, so in general, they drop in value when interest rates go up (as they are likely to continue doing over the next year or so); they rise in value when interest rates go down.
As well, the underlying credit quality of the company issuing the preferred shares can be a negative factor; for example, when its share price falls, the value of its preferred shares typically fall, too.
However, if you want to own preferred shares as part of the fixed-income segment of your portfolio, and you can accept some risk, then preferreds are okay to hold.
That’s especially true of preferreds from high-quality issuers, including the Big Five banks, many Canadian utility companies and other major issuers....
Those exclusive names are licensed to Pizza Pizza for 99 years....
However, BCE is down just 8% this year. That’s because consumers and businesses increasingly rely on its services, no matter the direction of the overall economy....
STATE STREET CORP. $63 is a buy. The company (New York symbol STT; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 367.6 million; Market cap: $23.2 billion; Price-to-sales ratio: 2.1; Dividend yield: 4.0%; TSINetwork Rating: Average; www.statestreet.com) sells accounting and administrative services to operators of mutual funds and pension plans.
State Street recently agreed to pay $3.5 billion for the investor services division of Brown Brothers Harriman & Co....
NortonLifeLock has just received key regulatory approval to complete its acquisition of European cybersecurity firm Avast plc for $8 billion.
Meantime, NortonLifeLock continues to attract new customers as people working from home spurs a jump in cyberattacks....
WELLS FARGO & CO. $41 remains a buy. The bank (New York symbol WFC; Income Portfolio, Finance sector; Shares outstanding: 3.8 billion; Market cap: $155.8 billion; Price-to-sales ratio: 2.1; Dividend yield: 2.9%; TSINetwork Rating: Average; www.wellsfargo.com) is third-largest banking firm in the U.S., with total assets of $1.90 trillion.
Wells Fargo expects rising interest rates will slow demand for new mortgages and other loans.
However, it will earn higher income on credit cards and other loans....