Shares that pay a dividend ?

Cabinteely

Hi guys,

I am interested in putting a couple of bob in to some shares at the end of the month. I am no stranger to investing but I have not really delved in to the stock market as of yet. My objective is to profile companies that I can invest in that pay a dividend.

The questions I have are:

How do you determine if a share pays a dividend (either annually or otherwise)?

If I use a platform like DeGiro, will I receive a dividend? and if not, with whom do I need to invest with to receive that dividend?

I really appreciate any direction you may be able to give me,

I look forward to hearing back from you,

Thanks in advance,

Cabinteely

valoren

Cabinteely wrote: »

Hi guys,

I am interested in putting a couple of bob in to some shares at the end of the month. I am no stranger to investing but I have not really delved in to the stock market as of yet. My objective is to profile companies that I can invest in that pay a dividend.

The questions I have are:

How do you determine if a share pays a dividend (either annually or otherwise)?

If I use a platform like DeGiro, will I receive a dividend? and if not, with whom do I need to invest with to receive that dividend?

I really appreciate any direction you may be able to give me,

I look forward to hearing back from you,

Thanks in advance,

Cabinteely

I look at mainly US companies that pay dividends. There are 4 payments per year. Irish and UK companies pay twice afaik (an interim one and then a final one). De Giro as a platform allows for the dividend payment to be received as cash. They do not provide a 'reinvestment' option i.e. where you can elect to buy more shares instead of receiving the dividend in cash. Note there is 15% taxation on any dividends received, this is applied on the payment date issued by the company. You must sign a mandatory W-8BEN form to allow for this as an overseas investor.

Type in any company e.g. 'Apple Stock' in google and in the results if the 'Div Yield' has a percentage then a dividend is paid. To see how much the dividend is, take a note of the ticker symbol e.g. AAPL and enter in on nasdaq.com. On the left under 'fundamentals', you will see Dividend History which shows how much the quarterly dividend is.

Note the the ex-div date is the cut off point i.e. you must hold the stock before that date in order to receive that dividend. Payment date is self explanatory.

For me the core group of 'blue chip dividend' companies is the following list, all of which pay a dividend. (be careful though, the likes of General Electric for example, cut their dividend).

Exxon, Chevron, Conoco, Shell, BP, Pepsi, Coca-Cola, Dr. Pepper, Southern Company, Aqua America, Kimberly Clark, Colgate Palmolive, Lockheed Martin, Microsoft, IBM, Emerson Electric, General Electric, Johnson & Johnson, Procter & Gamble, Nestle, Clorox, Wal-Mart, US Bancorp, Anheuser Busch, Diageo, Kraft, Abbott Labs, 3M, Aflac, Tiffany, Brown Forman, Visa, Pfizer, Mastercard, Kellogg, Boeing, American Express, Unilever, JP Morgan, Becton Dickinson, Hershey, Philip Morris International, AT&T, Disney, McDonalds, Church & Dwight, Realty Income, Campbell Soup, Wells Fargo, and General Mills

To buy one share of each of the above would cost you circa $5,000 at todays prices for example.

Cabinteely

valoren wrote: »

I look at mainly US companies that pay dividends. There are 4 payments per year. Irish and UK companies pay twice afaik (an interim one and then a final one). De Giro as a platform allows for the dividend payment to be received as cash. They do not provide a 'reinvestment' option i.e. where you can elect to buy more shares instead of receiving the dividend in cash. Note there is 15% taxation on any dividends received, this is applied on the payment date issued by the company. You must sign a mandatory W-8BEN form to allow for this as an overseas investor.

Type in any company e.g. 'Apple Stock' in google and in the results if the 'Div Yield' has a percentage then a dividend is paid. To see how much the dividend is, take a note of the ticker symbol e.g. AAPL and enter in on nasdaq.com. On the left under 'fundamentals', you will see Dividend History which shows how much the quarterly dividend is.

Note the the ex-div date is the cut off point i.e. you must hold the stock before that date in order to receive that dividend. Payment date is self explanatory.

For me the core group of 'blue chip dividend' companies is the following list, all of which pay a dividend. (be careful though, the likes of General Electric for example, cut their dividend).

Exxon, Chevron, Conoco, Shell, BP, Pepsi, Coca-Cola, Dr. Pepper, Southern Company, Aqua America, Kimberly Clark, Colgate Palmolive, Lockheed Martin, Microsoft, IBM, Emerson Electric, General Electric, Johnson & Johnson, Procter & Gamble, Nestle, Clorox, Wal-Mart, US Bancorp, Anheuser Busch, Diageo, Kraft, Abbott Labs, 3M, Aflac, Tiffany, Brown Forman, Visa, Pfizer, Mastercard, Kellogg, Boeing, American Express, Unilever, JP Morgan, Becton Dickinson, Hershey, Philip Morris International, AT&T, Disney, McDonalds, Church & Dwight, Realty Income, Campbell Soup, Wells Fargo, and General Mills

To buy one share of each of the above would cost you circa $5,000 at todays prices for example.

Thank you so much for this information. Its genuinely appreciated.

Do you mind me asking which brokerage is the best (lowest fees etc) to work with that will auto re invest these dividends for me?

Again thank you for coming back to me and I look forward to your response.

Have a good day,

Kind regards,

Cabinteely

flc37ie6ojwkh8

Bought tesla shares because of FOMO and without knowing they dont pay dividends. Anyway I earned a lot.

Phoebas

Are there any ETFs that bundle high dividend paying stocks?

valoren

Phoebas wrote: »

Are there any ETFs that bundle high dividend paying stocks?

Vanguard High Dividend Yield ETF (ticker VYM)

Largest Holdings are below.

1 Microsoft Corp.
2 Johnson & Johnson
3 JPMorgan Chase & Co.
4 Exxon Mobil Corp.
5 Wells Fargo & Co.
6 AT&T Inc.
7 Chevron Corp.
8 Procter & Gamble Co.
9 Intel Corp.
10 Verizon Communications Inc.

Dardania

Phoebas wrote: »

Are there any ETFs that bundle high dividend paying stocks?

In the EU there's these ones: https://www.justetf.com/en/find-etf.html?groupField=none&sortField=ter&sortOrder=asc&assetClass=class-equity&equityStrategy=Dividend&distributionPolicy=distributionPolicy-distributing
This particular one was good for me in the past: https://www.ishares.com/be/institutional/en/products/251788/ishares-euro-stoxx-select-dividend-30-ucits-etf-de-fund?siteEntryPassthrough=true&locale=en_BE&userType=institutional - this is a distributing one which pays out dividends to you
In the EU, these are ones which reinvest the dividend automatically: https://www.justetf.com/en/find-etf.html?groupField=none&sortField=ter&sortOrder=asc&assetClass=class-equity&distributionPolicy=distributionPolicy-accumulating&equityStrategy=Dividend

In the US, this is a good list: http://www.etf.com/sections/features-and-news/top-us-dividend-etfs?nopaging=1
There is reference to Aristocrat stocks - these are widely recognised as having increased their dividend over the past period - so look out for those ETFs in particular.

Regarding ETFs, be aware that there are different taxation rules for US domiciled ETFs versus EU (incl. Ireland) - EU ones are referred to as UCITS and have special 8 year "demmed disposal" taxes due. In a calculation I did on another thread, I found that if you go with UCITS type ETFs, it's essential to get accumulating ETFs in order to minimise the (hefty) tax impact.
Regarding US ETFs, there is an issue this year with Europeans buying them due to the recent MIIFID regulations, via European stockbrokers. So you would generally need to open a US trading account.
Also regarding US ETFs, bear in mind currency fluctuations between Euro & Dollar

valoren

Cabinteely wrote: »

Thank you so much for this information. Its genuinely appreciated.

Do you mind me asking which brokerage is the best (lowest fees etc) to work with that will auto re invest these dividends for me?

Again thank you for coming back to me and I look forward to your response.

Have a good day,

Kind regards,

Cabinteely

I don't think any operations offer dividend reinvestment (DRIP) for US companies.

Computershare in the UK would do so but I've not used them and unsure if they are open to Irish residents.

Sabre Man

For US shares dividend.com will give you information about the dividend. If a share isn't listed it doesn't pay.

Bobeagleburger

Another thing to remember is tax on dividends which is quite high if you're on the higher rate of income tax.

thereality

Don't buy US shares. The US sounds like it may enter a currency war ie they may devalue the currency. A major problem with high dividend yield stocks is that they often can't afford to pay them eg utilities will likely slash yields in the US. There are questions whether Carillion was in fact in a position to pay dividends

There decent companies in Ireland that don't pay dividends or pay weak dividends eg BOI, Applegreen. Searching for yield will likely result in your ignoring decent companies

garrettod

thereality wrote: »

....Searching for yield will likely result in your ignoring decent companies

Maybe, maybe not ...

Some companies may have sustainable earnings and be able to pay a regular dividend, while others may not (so for me, they may not be "decent companies")

Some companies may elect not to pay a regular dividend, but instead invest their earnings year after year in solid projects or acquisitions, which visibly generate additional capital value for the shareholder .... others pi$$ their earnings away on silly stuff, when the shareholders might have done a lot better had they received their dividend each year. So, not all are "decent companies".

I'd rather see a company with a regular dividend payout policy of part of it's annual earnings (say 40% - 50%) myself, while retaining the rest of it's annual earnings for occasional sensible acquisitions or new projects....

Captainsatnav

Hi - some shares (eg Applegreen) are blank in the Dividends field on Reuters, Google Finance for example but do list a dividend yield on others (Davy). Any reason for this?

doctorg

Do you need to hold a stock for a certain duration before being eligible to receive the dividend ?

Can it be beneficial to just purchase stocks just before the quarterly results to cash in on the dividends ?

Dardania

doctorg wrote: »

Do you need to hold a stock for a certain duration before being eligible to receive the dividend ?

Can it be beneficial to just purchase stocks just before the quarterly results to cash in on the dividends ?

Generally, if you own it on the particular date when the dividend is declared (I think) you receive it.
It generally isn't advantageous to own the stock solely to receive the dividend in the way you describe - usually the price before & after the dividend payment factors in the value of the dividend.

On a separate note, sounds like BOI could be a dividend paying stock now...

garrettod

doctorg wrote: »

Do you need to hold a stock for a certain duration before being eligible to receive the dividend ?

No, you just need to hold the share the day before and day that it goes "ex div".

Can it be beneficial to just purchase stocks just before the quarterly results to cash in on the dividends ?

It can be beneficial to hold stocks just before results are released, in the hopes that results are better than analysts and investors expected, so the share gets a lift in price, or on rare occasion, a share buy back is announced, or larger dividend is declared. However, these are rare occurrences.

Cute Hoor

doctorg wrote: »

Do you need to hold a stock for a certain duration before being eligible to receive the dividend ?

Can it be beneficial to just purchase stocks just before the quarterly results to cash in on the dividends ?

A company will declare a dividend with an ex-dividend date and a payment date.

For example, CompanyX declares a dividend of 1 euro on 1st January 2018, with an ex-dividend date of 22nd February and a payment date of 28th February. Generally speaking (all things being equal) you will get a little run up in share price up to the ex-dividend date, and a drop (close enough to the dividend value) on the ex-dividend date. In this example, if you buy the shares on 21st February you will be entitled to the dividend, if you buy on 22nd February you are not entitled to the dividend.

Siamsa Sessions

Hi all,

I've been meaning to throw a few quid into coffee at some level with the last while and Starbucks has caught my eye: https://investor.starbucks.com/stock-information/dividend-and-stock-split-history/dividend-reinvestment-and-direct-stock-purchase-sale/default.aspx

Investing is new to me but it looks like they pay a dividend 4 times a year, as was said on this thread re US companies.

Anyone invest in similar commodities or any experience they might share?

Thanks.

Cute Hoor

Engie might be worth considering if you're looking for a dividend stock, just finished year 2 of a 3 year transformation programme, CE says the the programme is 90% completed, beat analyst expectations on net income and proposed dividend, appear to have a good management team in place, coming off an all time low sp although they continued to pay a reasonable (although reduced) dividend every year, increased dividend (0.70 to 0.75), would hope/expect that the sp will continue to head north (although not at breakneck speed), up around 4% on the news today, paying around 5.7% dividend based on today's share price and I would hope/expect that % will only improve.

DYOR of course.

valoren

Siamsa Sessions wrote: »

Hi all,

I've been meaning to throw a few quid into coffee at some level with the last while and Starbucks has caught my eye: https://investor.starbucks.com/stock-information/dividend-and-stock-split-history/dividend-reinvestment-and-direct-stock-purchase-sale/default.aspx

Investing is new to me but it looks like they pay a dividend 4 times a year, as was said on this thread re US companies.

Anyone invest in similar commodities or any experience they might share?

Thanks.

I have some Starbucks stock, it's not a core holding. Looking to add a lot more when it drops to $50 and below per share. PEG Ratio is 1.48 so under 2 which is good. The beta is excellent at 0.53. The pe ratio is just over 20 so a little high. The dividend is $1.20 per year which is ok. All in all SBUX is for me still a growing company, the McDonalds of the 21st Century, would like as an investor to see them branch out into more food. It's on my watch list but given the pe ratio would like to see it fall to $50 before adding more.

Siamsa Sessions

valoren wrote: »

I have some Starbucks stock, it's not a core holding. Looking to add a lot more when it drops to $50 and below per share. PEG Ratio is 1.48 so under 2 which is good. The beta is excellent at 0.53. The pe ratio is just over 20 so a little high. The dividend is $1.20 per year which is ok. All in all SBUX is for me still a growing company, the McDonalds of the 21st Century, would like as an investor to see them branch out into more food. It's on my watch list but given the pe ratio would like to see it fall to $50 before adding more.

Great - thanks for the very useful insight.

I'm a novice but very interested in the basics of stocks/shares. Are there any good fundamental books people might recommend for bedtime reading?

Thanks.

valoren

Siamsa Sessions wrote: »

Great - thanks for the very useful insight.

I'm a novice but very interested in the basics of stocks/shares. Are there any good fundamental books people might recommend for bedtime reading?

Thanks.

One up on Wall Street is a good one by Peter Lynch.

One useful valuation metric popularised from that book is the PEGY ratio.

Where you take the (Price divided by Earnings per Share to get the PE ratio).
You then divide that number by the (Long term expected earnings growth rate* plus the dividend yield)

Based on the output, anything at 1.00 is fair value. Under is a bargain and over is over priced. Obviously this includes using analyst driven earning predictions but it's a useful metric.

* I usually take the EPS Next 5 year percentage from Finviz and the 'Long Term 5 yr' percentage from the below and get the average for the two.

https://finviz.com/quote.ashx?t=sbux
https://www.nasdaq.com/symbol/sbux/earnings-growth

To give and example;
SBUX closed Friday at $56.31
The EPS is currently $3.13 which gives a PE ratio of 18.01

5 year expected growth rate for earnings is 16.84% from finviz and 14.50% from nasdaq
Average is 15.67%. The dividend yield based on asking price and the current cash dividend is 2.13%
Essentially, the expectation from analysts which follow SBUX stock is that next years earnings per share are expected to be $3.62 i.e. a 15.67% increase. The price of the stock then fluctuates based on how the company (which you own a part of) is performing.

This gives PEGY ratio of 1.01 so from that you can see that Starbucks is close to or at fair value.
Not a steal per say at $56.31 but a solid initial investment standpoint. If you already owned some then it would be an indicator to add to the position at fair value because what you're really doing is paying for future expected earnings. The price is just what you pay for those earnings.

I'd love to own some Coca Cola (PEGY 3.66) or Nike (PEGY 2.79) but based on the above ratio with the expected earnings and current earnings the 'asking' price is too high. I guess for such sturgid, solid companies companies you must be willing to pay a premium for the quality of the earnings.

Siamsa Sessions

valoren wrote: »

One up on Wall Street is a good one by Peter Lynch.

One useful valuation metric popularised from that book is the PEGY ratio.

Where you take the (Price divided by Earnings per Share to get the PE ratio).
You then divide that number by the (Long term expected earnings growth rate* plus the dividend yield)

Based on the output, anything at 1.00 is fair value. Under is a bargain and over is over priced. Obviously this includes using analyst driven earning predictions but it's a useful metric.

* I usually take the EPS Next 5 year percentage from Finviz and the 'Long Term 5 yr' percentage from the below and get the average for the two.

https://finviz.com/quote.ashx?t=sbux
https://www.nasdaq.com/symbol/sbux/earnings-growth

To give and example;
SBUX closed Friday at $56.31
The EPS is currently $3.13 which gives a PE ratio of 18.01

5 year expected growth rate for earnings is 16.84% from finviz and 14.50% from nasdaq
Average is 15.67%. The dividend yield based on asking price and the current cash dividend is 2.13%
Essentially, the expectation from analysts which follow SBUX stock is that next years earnings per share are expected to be $3.62 i.e. a 15.67% increase. The price of the stock then fluctuates based on how the company (which you own a part of) is performing.

This gives PEGY ratio of 1.01 so from that you can see that Starbucks is close to or at fair value.
Not a steal per say at $56.31 but a solid initial investment standpoint. If you already owned some then it would be an indicator to add to the position at fair value because what you're really doing is paying for future expected earnings. The price is just what you pay for those earnings.

I'd love to own some Coca Cola (PEGY 3.66) or Nike (PEGY 2.79) but based on the above ratio with the expected earnings and current earnings the 'asking' price is too high. I guess for such sturgid, solid companies companies you must be willing to pay a premium for the quality of the earnings.

Great - that's a load of stuff I can try to figure out. Will probably order that book too. Thanks a million.