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Stocks with Best Dividend Yields

  • 19-08-2020 3:36pm
    #1
    Registered Users Posts: 69 ✭✭ inisfree0504


    I have two questions really (one may not be relevant to this forum) and am wondering if anyone has any experience.

    I've had no taxable income in 2020 so far as I was in full time education and after had family commitments. I've just realised that this means I can use my personal income tax credit against dividends (or at least I see no reason why I can't). Is this correct?
    I'm also assuming that this means dividend income will be taxed at the lower rate?

    So far, I've mainly been trading for profits, but I've reached well above the CGT exemption threshold so dividend income seems more sensible if I'm correct in the above. As the 2020 ex-dividend date has passed for some biannual paying stocks etc, I'm wondering if anyone any suggestions for stocks with high dividend yields but with relatively static share prices?

    Thanks


Comments

  • Registered Users Posts: 1,995 ✭✭✭ Sabre Man


    Yes, dividends are taxed as income.


  • Registered Users Posts: 1,094 ✭✭✭ Joeyjoejoe43


    Sabre Man wrote: »
    Yes, dividends are taxed as income.

    I was looking at high dividend stocks recently. Here are some that I took note of at the time. Some solid companies here whose share price tends not to fluctuate wildly unless there is a scandal or new innovation/massive sales etc

    Duke energy 4% div 80% safe
    Verizon 4.4% div 87% safe
    WP Carey REIT 5.1% 73% safe
    AT&T 5.7% 65% safe
    Tellus 4.7% div 72% safe
    Dominion Energy 4.5% 75% safe

    Johnson and Johnson 2.82% div
    Coca Cola 3.49% div
    Exxon 7.42% div
    Pfizer 4.58% div


  • Moderators, Business & Finance Moderators Posts: 7,811 Mod ✭✭✭✭ Jim2007


    When shares go ex-div there is usually a price drop and since you need to hold them on the day they go ex-div, I’m no convinced this is a great strategy.


  • Registered Users Posts: 194 ✭✭ outonawing


    I have two questions really (one may not be relevant to this forum) and am wondering if anyone has any experience.

    I've had no taxable income in 2020 so far as I was in full time education and after had family commitments. I've just realised that this means I can use my personal income tax credit against dividends (or at least I see no reason why I can't). Is this correct?
    I'm also assuming that this means dividend income will be taxed at the lower rate?

    So far, I've mainly been trading for profits, but I've reached well above the CGT exemption threshold so dividend income seems more sensible if I'm correct in the above. As the 2020 ex-dividend date has passed for some biannual paying stocks etc, I'm wondering if anyone any suggestions for stocks with high dividend yields but with relatively static share prices?

    Thanks

    Most US dividend paying companies pay out quarterly and some pay monthly.

    Choosing a few Dividend Aristocrats or Dividend Kings seems like an eminently sensible approach to me, especially if you are being taxed @ 20%.


  • Moderators, Business & Finance Moderators Posts: 7,811 Mod ✭✭✭✭ Jim2007


    outonawing wrote: »
    Most US dividend paying companies pay out quarterly and some pay monthly.

    Choosing a few Dividend Aristocrats or Dividend Kings seems like an eminently sensible approach to me, especially if you are being taxed @ 20%.

    And how exactly would you propose to deal with the ex-div price drop and the fact that even blue chips have a wide 52 week price range?

    Going into what could be the worst recession in 100 years, this a high risk strategy that could see the OP exposed for years to come and all for 20% on low single digit returns.

    In 2006 UBS was one of the most widely held ‘safe’ dividend stocks, it was in most Europe pension fund portfolios and traded at between 78 - 85 CHF. Between 2007 and 2009, the GIS were so confident of it that they spent an estimated $11b buying 50 CHF options on it. UBS never recovered, over the past 13 years it has traded in the 11 - 23 CHF range.

    Sensible is not a word I’d associate with this kind of strategy.


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  • Registered Users Posts: 194 ✭✭ outonawing


    Jim2007 wrote: »
    And how exactly would you propose to deal with the ex-div price drop and the fact that even blue chips have a wide 52 week price range?

    Going into what could be the worst recession in 100 years, this a high risk strategy that could see the OP exposed for years to come and all for 20% on low single digit returns.

    In 2006 UBS was one of the most widely held ‘safe’ dividend stocks, it was in most Europe pension fund portfolios and traded at between 78 - 85 CHF. Between 2007 and 2009, the GIS were so confident of it that they spent an estimated $11b buying 50 CHF options on it. UBS never recovered, over the past 13 years it has traded in the 11 - 23 CHF range.

    Sensible is not a word I’d associate with this kind of strategy.

    I am not an investment advisor and am not offering investment advice, merely giving my opinion, which giving my history, could indeed be foolish.

    No doubt Jim, you will offer the OP a more enlightened strategy, in due course.


  • Moderators, Business & Finance Moderators Posts: 7,811 Mod ✭✭✭✭ Jim2007


    outonawing wrote: »
    No doubt Jim, you will offer the OP a more enlightened strategy, in due course.

    It is not rocket science, you don't invest in stocks for the short term and when you do, you done take on that level of risk for a poor return.


  • Registered Users Posts: 194 ✭✭ outonawing


    Jim2007 wrote: »
    It is not rocket science, you don't invest in stocks for the short term and when you do, you done take on that level of risk for a poor return.

    A tad contradictory there Jim, believe it or not, people do buy some stocks for the short term.


  • Moderators, Business & Finance Moderators Posts: 7,811 Mod ✭✭✭✭ Jim2007


    outonawing wrote: »
    A tad contradictory there Jim, believe it or not, people do buy some stocks for the short term.

    Just because people do foolish things does not mean that you have to follow them.

    After thirty years working in the asset management area I know very well what people do. And I also know that may people who put large sums of money on the table for a small return often get badly burned.

    And as for day traders, well in the long run they are very lucky to come away with their original stake.


  • Registered Users Posts: 194 ✭✭ outonawing


    Jim2007 wrote: »
    Just because people do foolish things does not mean that you have to follow them.

    After thirty years working in the asset management area I know very well what people do. And I also know that may people who put large sums of money on the table for a small return often get badly burned.

    And as for day traders, well in the long run they are very lucky to come away with their original stake.

    Finally, something we can agree on.


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