Best Dividend Stocks

Why income investors constantly trying to find the best stock dividends? Where can you find the best stocks? When a dividend too high to be safe? We will try to answer these questions and other dividends in this article.

The dividend yields: Income investors are always seeking to improve their dividend yield, either by finding and investing in stocks with high dividend yields, or by selling covered call options against their paying stocks dividends to increase their dividend income.

Why are dividends so important for the average investor?

Here are two examples of why dividends are very important for the average investor.

1. In a study of the period 1926 - 2004, it was shown that dividends have accounted for 35% return for shareholders. Somewhat important, right? Wait, it gets better ...

When you add to the effect of compounding and reinvesting the dividends returned over the price increase more than 25 times during this period.

Look at what a different perspective, another delay:

2. During the period 1986 - 2005, $ 1.00 invested in the S & P 500 had $ 45 in higher prices. If you include reinvested dividends, however, that $ 1.00 would have earned $ 8.09, 18 times more than the price increase.

Where can the average investor Find the Best high dividend stocks?

Certain industries tend to pay higher dividends than others. Some examples of this are: The Shipping Industry: Since this group is so unstable, they gravitated toward prompting investors with dividend yields historically high. However, look below! "As they say on the boats, because these stocks often take you on a roller coaster ride that you will along the shore.

Telecommunications: This group also tends to feature high-dividend stocks. Like any stock, you dig deeper, namely those that are worth investing in. Currently, the major trend in wireless telecommunications has been seen, if firms that are strictly land were somewhat the favor of investors who believe that the trend for customers to cell phones is definitely beyond the traditional land lines.

REIT (Real Estate Investment Trusts) are mutual fund money, which were organized to invest in various types of property such as malls or shopping centers, or health care facilities. REITs do not pay corporate taxes, but they must pay at least 90% of their profits to shareholders.

There are plenty of high dividend stocks in this group. Their distributions of dividends are not eligible for the rate of 15% qualified dividend tax. 2008-2009 The current credit and economic crises have led many investors to flee from this group, because of worries and debt financing.

Look for well-funded companies in an industry that is more immune to economic cycles, such as health care.

MLP (master limited partnerships): There are many independent oil stocks, stocks of natural gas and pipeline stocks in this group, which pay a high dividend yield. MLPs are required by law to pay at least 90% of their earnings to "unitholders" (shareholders) in exchange for not having to pay tax on corporations. Their distributions are not eligible for the rate of 15% qualified dividend tax. It holds many promising dividend stocks for income investors, especially those companies that already have or are investing in the infrastructure of pipelines to handle the boom in natural gas from U.S.

When a dividend yield too high?

It is an evolving problem, since stock prices and yields are still evolving. In fact, the market declines of 2008 and early 2009 has many "average dividend yields" to soar, as the share prices of companies decreased. In addition, many companies cut their dividends to preserve cash.

Currently, the average S & P 500 dividends.