Dividend Paying Shares

Thargor

Dont want to make yet another 50k to invest thread but I have 50k sitting in prize bonds that I need to do something with, Id love to be able to pick a diversified basket of dividend paying shares and park it there instead especially with dividend reinvestment. I have no need of the money for the next few years as I cant even decide if Im staying in this country/this career.

Only thing holding me back is a suspicion that the markets have topped out in the last year or so and we could be due another bearish couple of years or even a crash, what are peoples opinions on this? It completely varies from analyst to analyst Ive found lately aswell. Looking at FTSE/DOW/Others its not pretty either:

irishnh

Certainly the markets are really high now and have started to wobble. I'm looking at a similar plan, in the US market, as the dividend yield in Irish market is minimal.

What I've done is to go through nearly all US stocks with a minimum of 10 years of increasing dividends. Any that have less are weeded out. Then I add in a few other factors, at least 8% dividend $ growth a year, good P/E ratio & payout ratios under 75%.

So I've gone from a good few hundred shares to maybe 60-90 shares now. These I track in an online free watchlist. Most of them are low yields (1%, 2%, a few 3%) but when any hit over the 4.7% dividend yield rate, that's my buy signal. My plan is to buy, hold forever and reinvest all dividends. If the stock goes up, brilliant. If the stock goes down, even better as I can buy more stocks when my dividends is paid out in 3 months time.

My only challenge now is to find a online account that will allow me to reinvest dividends for free, and have max $15 per trade for when I purchase them initially. If anyone knows of one I'd be hugely grateful if you could let me know. I don't think ig.com offers one now.

Thargor

Thanks for that Irishnh you are thinking exactly like I am and your approach sounds brilliant, Id actually be copying you right now if markets didnt look so high. I have 50k parked in Prize Bonds and the rest in cash at the minute, Im waiting until Christmas to see what happens then making my decision in the new year.

Would love to hear how you get on or who you're buying.

Sonnenblumen

irishnh wrote: »

Certainly the markets are really high now and have started to wobble. I'm looking at a similar plan, in the US market, as the dividend yield in Irish market is minimal.

What I've done is to go through nearly all US stocks with a minimum of 10 years of increasing dividends. Any that have less are weeded out. Then I add in a few other factors, at least 8% dividend $ growth a year, good P/E ratio & payout ratios under 75%.

So I've gone from a good few hundred shares to maybe 60-90 shares now. These I track in an online free watchlist. Most of them are low yields (1%, 2%, a few 3%) but when any hit over the 4.7% dividend yield rate, that's my buy signal. My plan is to buy, hold forever and reinvest all dividends. If the stock goes up, brilliant. If the stock goes down, even better as I can buy more stocks when my dividends is paid out in 3 months time.

My only challenge now is to find a online account that will allow me to reinvest dividends for free, and have max $15 per trade for when I purchase them initially. If anyone knows of one I'd be hugely grateful if you could let me know. I don't think ig.com offers one now.

I think it much easier to identify suitable targets and certainly identifying cos paying consistently 3% divi is not too onerous. The most effective way of re-investing divi incomes is to sign up to a SCRIP or DRIP with the respective co. Mind you not all divi paying cos do it, but those that do, do so at a minimum cost to investors.

I agree a have and hold approach works well for divi paying darlings

irishnh

irishnh wrote: »

Certainly the markets are really high now.

One sector isn't.

If you believe that oil is a cyclical industry, then there is exceptional value available now... like 7% dividend yield and the prospects of substantial capital gains when the oil price recovers.

Prezatch

irishnh wrote: »

Certainly the markets are really high now and have started to wobble. I'm looking at a similar plan, in the US market, as the dividend yield in Irish market is minimal.

What I've done is to go through nearly all US stocks with a minimum of 10 years of increasing dividends. Any that have less are weeded out. Then I add in a few other factors, at least 8% dividend $ growth a year, good P/E ratio & payout ratios under 75%.

So I've gone from a good few hundred shares to maybe 60-90 shares now. These I track in an online free watchlist. Most of them are low yields (1%, 2%, a few 3%) but when any hit over the 4.7% dividend yield rate, that's my buy signal. My plan is to buy, hold forever and reinvest all dividends. If the stock goes up, brilliant. If the stock goes down, even better as I can buy more stocks when my dividends is paid out in 3 months time.

My only challenge now is to find a online account that will allow me to reinvest dividends for free, and have max $15 per trade for when I purchase them initially. If anyone knows of one I'd be hugely grateful if you could let me know. I don't think ig.com offers one now.

Can I ask what online platform you use to monitor your shortlist - does it spit out info like P/e, dividend yield etc? I like google finance but find it can be a bit limited

Thedeerstalker

Aged cigar investments....Check it out.

irishnh

Deleted User wrote: »

One sector isn't.

If you believe that oil is a cyclical industry, then there is exceptional value available now... like 7% dividend yield and the prospects of substantial capital gains when the oil price recovers.

YUP - I've been looking at XOM and waiting until it reaches 4.7% dividend yield.

Fizman

I see you have a policy of waiting until stocks reach this threshold. Out of interest, is your strategy buy and hold for long term? I just feel you are doing yourself a bit of a disservice waiting on high yields. But again, it depends on your individual strategy.

I'm interested in Exxon too and think I'll be buying at some point down the line. I already have some Royal Dutch Shell so I'm not in a major panic as I'm only in the first few months of my Dividend Growth Portfolio so I don't want to be too exposed to energy stocks from the outset.

I got some J&J last month, and this month I went a bit left field and decided to go for Disney. Small yield but I like the idea of initiating a few positions in a few growth companies that have great dividend growth prospects down the line. Visa another company I have my eye on in that role.

irishnh

Fizman wrote: »

I see you have a policy of waiting until stocks reach this threshold. Out of interest, is your strategy buy and hold for long term? I just feel you are doing yourself a bit of a disservice waiting on high yields. But again, it depends on your individual strategy.

I'm interested in Exxon too and think I'll be buying at some point down the line. I already have some Royal Dutch Shell so I'm not in a major panic as I'm only in the first few months of my Dividend Growth Portfolio so I don't want to be too exposed to energy stocks from the outset.

I got some J&J last month, and this month I went a bit left field and decided to go for Disney. Small yield but I like the idea of initiating a few positions in a few growth companies that have great dividend growth prospects down the line. Visa another company I have my eye on in that role.

Yes buy & hold. There is a big difference if you start out with a 4% yield V a 4.7% yield. I've bought 2 stocks so far this month so I'm ok so far

Prezatch

JoeyD wrote: »

Can I ask what online platform you use to monitor your shortlist - does it spit out info like P/e, dividend yield etc? I like google finance but find it can be a bit limited

Just had a look around there, Finviz seems to be pretty useful

Sabre Man

I just signed up for a newsletter at dividend.com today and got to download a newsletter which mentioned Gladstone Capital Corp (GLAD). The share price seems pretty stable and dividend yield is just over 9%.

Might be worth looking into.

Fizman

irishnh wrote: »

Yes buy & hold. There is a big difference if you start out with a 4% yield V a 4.7% yield. I've bought 2 stocks so far this month so I'm ok so far

True that there is a difference, but personally I feel that I'd be neglecting a lot of great companies at fair / cheap prices if I was holding out for 4.7% all the time. Exxon at $78 right now, down 20% from 52 week high of 97. To hit 4.7%, you need the stock to get to approx $62 per share, that's a further 20% drop. Still quite a way to go there!

rain_soaked

irishnh wrote: »

Certainly the markets are really high now and have started to wobble. I'm looking at a similar plan, in the US market, as the dividend yield in Irish market is minimal.

What I've done is to go through nearly all US stocks with a minimum of 10 years of increasing dividends. Any that have less are weeded out. Then I add in a few other factors, at least 8% dividend $ growth a year, good P/E ratio & payout ratios under 75%.

So I've gone from a good few hundred shares to maybe 60-90 shares now. These I track in an online free watchlist. Most of them are low yields (1%, 2%, a few 3%) but when any hit over the 4.7% dividend yield rate, that's my buy signal. My plan is to buy, hold forever and reinvest all dividends. If the stock goes up, brilliant. If the stock goes down, even better as I can buy more stocks when my dividends is paid out in 3 months time.

My only challenge now is to find a online account that will allow me to reinvest dividends for free, and have max $15 per trade for when I purchase them initially. If anyone knows of one I'd be hugely grateful if you could let me know. I don't think ig.com offers one now.

avoid this advice OP , you could count on one hand the number of solid companies which pay a dividend of 8% and the dividend is unsustainable so if by virtue of a collapsed share price , the dividend is at 8% , its for a very negative reason , anything above 5% is too good to be true with the exception of REIT,s

id recommend the following

AT+T = dividend of about 5.5% , its twice as big as vodafone and is one of the big two telecom providers in the usa

shell = dividend is above 6% and due to the collapse in oil price , stock is below where it was ten years ago , even the dividend gets cut in half , your still getting a dividend which is above the market average

OHI , its a REIT, , they manage nursing homes all over america , dividend yield is above 6% and the share price is down quite a bit for the year as the fortunes of REIT,s are often tied to interest rates , when yellen chickened out from raising rates last month , the share price went up 10% within a week , its still over sold


HSBC , stock price trend is truly horrible but its one of the largest banks in the world and the one with the greatest expsosure to emerging markets so the bad news is probably priced in , dividend is above 5%

rain_soaked

irishnh wrote: »

YUP - I've been looking at XOM and waiting until it reaches 4.7% dividend yield.

thats not going to happen unless the share price drops another 45%

irishnh

"you could count on one hand the number of solid companies which pay a dividend of 8%"

I don't mean they pay 8% dividend yield, but the dividend paid each year grows by 8% when you compare how much they paid last year, to how much they paid this year. Thanks

For ever odd

http://www.dividend.com/dividend-stocks/

I use this, but for different reasons.

Fizman

irishnh wrote: »

"you could count on one hand the number of solid companies which pay a dividend of 8%"

I don't mean they pay 8% dividend yield, but the dividend paid each year grows by 8% when you compare how much they paid last year, to how much they paid this year. Thanks

Out of interest, what other elements make up your criteria for your stock picks, aside from the 4.7% yield?

27cyrix

Fizman wrote: »

Out of interest, what other elements make up your criteria for your stock picks, aside from the 4.7% yield?

Payout ratio, is the dividend sustainable?
PE, is it over priced?
Market cap
Number of year Dividend increased.

This is my 2cent

Sabre Man

Sabre Man wrote: »

I just signed up for a newsletter at dividend.com today and got to download a newsletter which mentioned Gladstone Capital Corp (GLAD). The share price seems pretty stable and dividend yield is just over 9%.

Might be worth looking into.

Its dividend yield is 9% but its P/E is only 5 (warning sign - why so low?). This is quite a small company, valued at less than $200 million. Obviously the market is worried here. The reason seems to be that they have lent a lot to the oil and gas sector. In the US the shale oil sector is undergoing a crisis and word is that many smaller companies are heading for bankruptcy in the coming months. IF they default on their loans to Gladstone and IF these loads are substantial this COULD affect Gradstone resulting in a divident cut and price drop.
On the other hand if this is not a factor Gladstone could be a great buy.
An example of where 'do your own research' and do lots of it is so important.

irishnh

Deleted User wrote: »

Its dividend yield is 9% but its P/E is only 5 (warning sign - why so low?). This is quite a small company, valued at less than $200 million. Obviously the market is worried here. The reason seems to be that they have lent a lot to the oil and gas sector. In the US the shale oil sector is undergoing a crisis and word is that many smaller companies are heading for bankruptcy in the coming months. IF they default on their loans to Gladstone and IF these loads are substantial this COULD affect Gradstone resulting in a divident cut and price drop.
On the other hand if this is not a factor Gladstone could be a great buy.
An example of where 'do your own research' and do lots of it is so important.

Re GLAD - the dividend stays the same each year at .84 (no increase, not good if you're buying for dividend growth) & payout ratio is too high for me.

27cyrix

This is my portfolio
Started 25th of August
https://docs.google.com/spreadsheets/d/1h89VR-HrcboCa2xG7ZuWe-BPnmcOefBIhR46vzUZJIg/edit?usp=sharing

I also have some money in etoro, because it allow me to invested as little as 50$ in stock. The only fee for buy stock is the spread
and the dividend is paid at the ex-dividend date
http://www.etoro.com/A53852_TClick.aspx
this link is my referral link, you and i will get 100$ bonus when you deposit 200$

27cyrix

Sabre Man wrote: »

I just signed up for a newsletter at dividend.com today and got to download a newsletter which mentioned Gladstone Capital Corp (GLAD). The share price seems pretty stable and dividend yield is just over 9%.

Might be worth looking into.

Something in my watch list - PFLT
PFLT also has nearly double digit dividend yield.

Fizman

27cyrix wrote: »

This is my portfolio
Started 25th of August
https://docs.google.com/spreadsheets/d/1h89VR-HrcboCa2xG7ZuWe-BPnmcOefBIhR46vzUZJIg/edit?usp=sharing

I also have some money in etoro, because it allow me to invested as little as 50$ in stock. The only fee for buy stock is the spread
and the dividend is paid at the ex-dividend date
http://www.etoro.com/A53852_TClick.aspx
this link is my referral link, you and i will get 100$ bonus when you deposit 200$

Nice little portfolio building up there. Out of interest, are you purchasing shares on a periodic basis? E.g. everytime you get some cash.

It seems you are buying around 500 each time. I've a little over 5k across 4 stocks (a DGI portfolio I started 4-5 months ago and intend to continue to drip into it over time). I've been making purchases at roughly 1k per position, making my cost basis 1%.

Sabre Man

27cyrix wrote: »

This is my portfolio
Started 25th of August
https://docs.google.com/spreadsheets/d/1h89VR-HrcboCa2xG7ZuWe-BPnmcOefBIhR46vzUZJIg/edit?usp=sharing

I love your spreadsheet. How is O working out for you? It's one I am considering.

27cyrix

Fizman wrote: »

Nice little portfolio building up there. Out of interest, are you purchasing shares on a periodic basis? E.g. everytime you get some cash.

It seems you are buying around 500 each time. I've a little over 5k across 4 stocks (a DGI portfolio I started 4-5 months ago and intend to continue to drip into it over time). I've been making purchases at roughly 1k per position, making my cost basis 1%.

Glad to hear more and more people start DGI.

My discount broker charge very little fees, so my goal is to build up a diversified portfolio as quick as possible.

The plan for the next year is add 500e to my portfolio twice a month(euro cost averaging).
Currently, as i just started, I have some cash in the bank, so i can open quite a lot positions.

27cyrix

Sabre Man wrote: »

I love your spreadsheet. How is O working out for you? It's one I am considering.

Hey Sabre Man,
The spreadsheet was original from no more waffle, and I changed it a bit so it meets my requirements.

IMO, O is relatively a good company. Its FFO basically covers the dividend, so no need to worry to much about cutting dividend.

I am not going to sell any positions in the coming 10 years, so i don't worry about the price neither.
O is still on my watch list, if the price goes down to 42, i probably will buy more:D

Fizman

Good stuff.

What kind of criteria do you have at the point of purchase?

I got my first dividend payout a few weeks ago from my Royal Dutch Shell position. 1st of many hopefully!

27cyrix

Fizman wrote: »

Good stuff.

What kind of criteria do you have at the point of purchase?

I got my first dividend payout a few weeks ago from my Royal Dutch Shell position. 1st of many hopefully!

I also brought few RDSB shares yesterday, we are holding a great company:)

At the point of purchase, i will consider where the current price set in the 52wk high/low. as long as the price is not close to the highest, it should be fine. yep, the lower the better, but not always.