Friday, September 23, 2011

How do I determine if a stock pays dividends?

I have been fairly successful with my common stock choices and am ready to purchase stock that pays dividends. How do i determine if a stock pays dividends?|||John W gave you a really good method of determining that. If you are interested in dividend paying stocks you will certainly want to check out this link below. It is a list of all the companies that have increased their dividend every year for at least the last 25 years.





http://investing-school.com/dividends-an鈥?/a>|||When you look up a stock on Yahoo Finance, where it says "Div %26amp; Yield", that's the dividend that was last paid. If it says "N/A" then that stock doesn't pay dividends. If you select "historical", you can choose to display only the dividends and see the history of dividend payments. Once a stock has been paying dividends for a while, it's attracted buyers that like dividends so the company is unlikely to stop paying dividends as that may encourage it's share holders to dump the stock.



Keep in mind that screening stocks for likely candidates for investment is just the pre-requisite due diligence, you then have to decide on how to enter the market, how much to enter with, how to exit the market and how much to exit with. Are you entering by buying a call option and waiting to see if it goes up or down by the call expiration to limit your losses, by buying a put option to ensure a sell price to limit your losses or are you using a stop loss to limit your losses? Have you estimated the intrinsic value of the stock to insure that you are buying the stock at a discount? Have you identified why the stock is at a discount and determined the time frame during which such a reason would exist? Have you determined the probabilities and outcomes of the uncertainty that is at the root of the discount and sized your investment accordingly? Have you decided at what point you would exit your positions and how much grace time you would give for whatever reason there is for the discount to resolve itself? Unless you can answer yes to those questions, you can't say that you've been successful with your stock choices.|||You cannot be guaranteed. If the stock has paid dividends in the pas (see Corporate website or Yahoo Finance) and it is well covered by earnings then you should be OK. BP was paying quarterly dividends until their little accidendt. I have known companies to declare a dividend then cancel it at the last moment at the AGM.|||A dividend is a cash payment made to the owners of a company, the shareholders of the company's stock. There are several reasons why a company would pay out a dividend.


Expansion and growth becomes costly. Employee stock options; its in their personal interest to have the company pay a dividend as they too will receive a payment. Shareholder expectations. A company goes into business to make money. It cannot put 100% of its profits into growth or there would be no point in going into business if there is no enjoyment of the profits.

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