| |
| |
|
Stocks & Mutual Funds Information |
|
|
|
Dividend Paying Stocks
I would like to share with the reader an article printed in the financial section of U.S.A. Today on March 7, 2003 which exemplifies the awesome power of a stock dividend. MICROSOFT TO ISSUE FIRST DIVIDEND TODAY: Microsoft investors will get their first payday today,when the tech giant shells out its first dividend. At 8cents a share, the dividend will cost the company $850million. Co-founder Bill Gates, who owns about 1.2 billion shares will receive a dividend of $96.5 million.The dividend marks a shift for Microsoft, which hadlong hoarded cash - to the tune of $43.4 billion - forresearch, acquisitions and legal claims. After reading this article I couldn't help thinking about a report, which I believe stated that there were an estimated 33 million people in America living under the official poverty level. Bill Gates, by giving away his Microsoft dividend to those living under the poverty level could begin to create 96 millionaires, year after year after year. What a boost to the economy that would be! Imagine all those new millionaires every year spending money on something other than food, Salvation Army clothing and shelter. Bill Gates (by giving away his Microsoft dividend) could begin to eliminate all the hardships for those people currently living under the poverty level. Of course, I would probably start feeling sorry for all those people who were living right at the poverty level. I could almost hear Ma telling Pa now, "If we only didn't sell those $40.00 worth of aluminum cans, we could have been millionaires right now." Then again, those newly created millionaires would probably begin buying computers filled with Microsoft software and Bill Gates would start getting his money back. And, if that wasn't enough, the newly created millionaires probably hadn't read my book! They would probably start using their computers to start day trading in the stock market and end up right back where they started. Holy moly! I better finish this book or they won't stand a chance! (Note: Bill Gates and family have already given millions and millions to charity. It was announced on CNBC that on April 24, 2003 Bill Gates had just donated 28 million dollars to S. Africa's AIDS program.) As an individual investor in the stock market for almost 40 years I have found that companies that raise their dividend every year outperform those companies that stop or trim their dividends. For example, Dominion Resources had raised their dividend from 1984 to 1994 every year, and then stopped in 1994. Since then the company continues to pay a 64½ cent a share dividend, with a dividend yield of around 4 percent a year. The stocks performance since 1994 has been mediocre, rising in price from the 40 dollar range in 1994 to the 60 dollar range in 2004. Now compare that stock's performance with Comerica, a company that has raised their dividend for the past 35 consecutive years. In April of 2003, Comerica's stock price was around 37 dollars a share, paying a dividend yield of around 5%. Today, July 20, 2004 the stock closed at $58.28 a share, paying a dividend yield of 3.57%. A $21.00 a share move in the stock in 1 year and 3 months and in March of 2005 the company will probably raise their dividend again for the 36th consecutive year. (By the way, Comerica's stock performance for the past 14½ years (just by having the dividends rolled back into the stock) has returned a little better than 15% a year, compounded annually.) The simple point I'm trying to make is to invest in those companies that have a history of raising their dividend every year. There are hundreds of them. A company that just pays a dividend is not good enough; find those companies with a historical record of raising their dividend every year. -- You have permission to this article either electronically or in print as long as the author bylines are included with a live link, and the article is not changed in any way (typos excluded.) Please provide a courtesy e-mail to charles@thestockopolyplan.com telling where the article was published. (646 word count) Charles M. O'Melia is an individual investor with almost40 years of experience and passion for the stock market. Author of the book 'The Stockopoly Plan', published by American-Book Publishing. For more excerpts from "The Stockopoly Plan' please visit http://www.thestockopolyplan.com
MORE RESOURCES:
Google News |
|
|
|
RELATED ARTICLES
Option Spread Trading Spread trading is a technique that can be used to profit in bullish, neutral or bearish conditions. It basically functions to limit risk at the cost of limiting profit as well. The Next Bull Market We are already in it, but you can't see it. It doesn't look like the one we had in '99. Where Is The Rabbit? We need a rabbit!This was a pretty horrible week for the market with two 100-point days and Friday closing on the lows.During these past few days Sir Alan told us things are looking up and the economy is basically strong. The Secret Art of Backtesting If you have not back tested your trading system, you might as well trade with your eyes close. In fact, whatever technical analysis criterion you use to trade with, be it moving averages, candle sticks, volatility breakouts, fibonacci retracements or any other trading system you have devised you're going to need to back test your trading system thoroughly and objectively in order to remove any possible doubt about it's capability. Good News? As the man said, "I've got some good news and I've got some bad news. What do you want to hear first?" It was replied, "Tell me the good news first". The Club Yesterday I received my monthly issue of MONEY magazine. This issue has the special feature called "The Ultimate Investment Club" that highlights their picks for the top mutual fund managers. Stock Market Investing Odds The greatest stock market myth is the idea that investing in stocks is a form of gambling!The financial markets are often compared to a casino. Put some money on X stock and you might as well be playing craps!If that's your impression, and it's keeping you out of the markets, consider this:If investing is organized gambling, it's one of the rare kinds where the odds are stacked in your favor!Why is that?Corporate profits are the key to understanding the investor's edge. Trading Tips No 6: The High Cost of Low Cost Stock Market Information It has been said that low cost or even free stock market information or trading advice can be the most expensive advice you can get. The meaning is clear. Trading vs Investing I often hear from people, "I don't trade. I invest. Dividend Paying Stocks I would like to share with the reader an article printed in the financial section of U.S. Psychology - How to Reduce Negative Thoughts Relating to Trading? The thinking process of the brain relating to the psychology of trading involves:-- Beliefs -- Feelings -- Values -- Dispositions and -- FaithThe positive or negative energy brings power to a person's actions, which ultimately determines whether a person is a winner or a loser. You can change for the better or for the worst. Price Targets Every day in any financial publication you will find the Wall Street mavens giving their predictions on many stocks. It was issued here and should go there. Diversification Wall Street's watchword has always been diversification, but what does it mean and why do they say it?The standard Wall Street definition is flexible because each broker or financial planner will vary the portfolio based on your age and income. They say that the younger you are the more risk you should take and the older you are the less risk. Market Experience of a Naïve Stock Operator Sometime in the third quarter of 1997, someone told me that I should play the stock market. Knowing nothing about the stock market, I turned to some colleagues to seem to know a lot about it. What is Involved in Peak Performance Trading? There is so much involved in developing peak performance, that I recommend that all traders have a business plan. We recommend that the business plan cover all of the following areas. What the SEC Really Thinks About Mutual Funds! Let's go into the details of why non-indexed mutual funds are such a bad deal. When Arthur Levitt became the head of the Security Exchange Commission in 1993 he had to sell off all of his individual stocks so that people would not claim that he was doing any dirty inside dealing. How Covered Calls Turned a Trader Around Sidney felt sick as she looked at her latest OptionsXpress trading statement. In just 8 months, she had managed to turn her $120,000 account balance into less than $70,000. Bottoms Ups If you have talked to a stock broker or financial planner in the last few days I will bet they all agree that there are some great bargains out there and now is the time to start buying in anticipation that the market will go back up. You will also find agreement from the talking heads on CNBC and those talk radio station stock mavens. How To Pick A Mutual Fund Mutual funds by definition are a mixed bag of stocks, bonds and a little cash. Their price per share is the NAV, Net Asset Value of the total amount of money in the mutual fund divided by the number of shares. Tips to Finding Other People's Simple Trading Plans Did you know you can make money (and a lot of it) by simply modeling someone else's trading plan? Yes, it is true. Unbelievably, there are many of trading gurus doing it RIGHT NOW.
|
| home | site map |
| © 2006 |