Best Dividends for the stock market?

Question

Which if any companies have a good reputation for paying high dividends for their shares. is it always the most expensive shares?

Answer 1

Plenty of companies pay hefty dividends. Ford (F) was paying a nice dividend until they recently announced they were cutting it. As you know, Ford is a cheap stock.

But the best paying dividend stocks are General Electric (GE) and Bank of America (BAC). For that matter, any large bank is sure to pay a nice dividend.

It's one of the most overlooked things in a stock, but long term, it is huge if reinvested in the stock.

Answer 2

Normally the best companies for dividends are large, mature companies in a market that is fully developed. The dividends make up for the fact that there is relatively little growth potential in these areas.

Banks and utilities are the classic divi payers - retailers used to be too, especially in mundane areas like food, but trading is tough at the moment. Motley Fool (link below) occasionally runs articles identifying the biggest-yielding shares, so it's worth keeping an eye on that.

There are three things to remember, though:
- some companies give seemingly high dividends because their stock price is falling in anticipation of bad results to be announced
- if you don't reinvest your dividends then return on the stock market is still better than in a bank, but not by as much: it is only the compounding effects of reinvestment that make shares the best long-term liquid (ie non-property) investment
- when your income is as dividends you will pay tax on them at the highest rate to which you are subject, whereas you can take £8.8k per year in profits from capital growth absolutely tax free

Answer 3

As a general rule the companies with large big dividends are companies whose stock is depressed and may be more likely to go down further in value.

So... you can earn 15% in dividends but your principle can go down by 25% or more. Not a good deal.

This is not to say all high dividend stocks are like this. But you have to be careful and find out why the dividend is high. It's usually a warning sign.

An example of a great stock with good dividends is HSBC Bank. But it's a foreign stock that can be effected by currency & international problems.

Bottom line: Don't use dividends as your only guide to buying a stock.

Answer 4

They aren't the most expensive shares. Companies which pay high dividends are typically blue-chip stocks across a variety of sectors (except technology). Lloyds TSB would be an example of a high dvd yield but you would be better of investing in a mutual fund to get wider exposure to such stocks and have this managed for you.
I would suggest Credit Suisse Asset Management Income Fund run by Etel Harris, if you've got money in Sterling
Mining companies like Rio Tinto have also been paying special dividends recently on the back of bullish markets

Answer 5

Actually, it is not the most expensive shares that pay big dividends. Normally, some of the largest payers are among the least expensive shares, oddly enough. The reason for this is the stocks with high dividends are not considered growth stocks and thus they command low PE ratios. Among the good dividend paying stocks are the large banks-- C and BAC. Not only do they pay dividends above 4% but they have raised their dividends consistantly for many years.

Answer 6

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RE:
Best Dividends for the stock market?
Which if any companies have a good reputation for paying high dividends for their shares. is it always the most expensive shares?

Answer 7

Tons of large, well-known, companies pay nice dividends. Banks and utilities have a nice reputation for paying dividends too. I love those dividends...especially since most companies increase them at a nice clip ever couple of years or so.

My favorite is Altria (MO-formerly Philip Morris).
Citigroup pays nearly 4% (that's higher than some of their CDs)
Procter Gamble PG
AT&T paying almost 4%
ExxonMobile 2%
UPS 2%
Bristol Meyers 4%
Merck 3%
Pfizer 3.5%
Wash Mutual 5%

Answer 8

look at KMP great dividend and a great company especially this time of year. It is better to save up and pay a little more for the bigger companies and get a nice dividend with little chance of the stock taking a dive

Answer 9

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Answer 10

As a percentage of share price I would look at the conroy's or reits out there. Generally they both yield above 10%. Check out PVX, ERF, PGH, HTE or NEW or IMH for example, remember you are clipped 15% by Cananda for any canadian trust distribution and then 15% by the US for anything in a non tax deffered account.