High Dividend Stocks

How does one go about finding dividend stocks that pay high dividend earnings?

Dividend Yield

If you are an investor looking for high dividend paying stocks then there are a couple of metrics you should be familiar with. Perhaps the most important dividend stock metric is dividend yield. Dividend yields are calculated by dividing the annual dividend per share by the stock’s price. This measure indicates the percentage return that the company pays shareholders in the form of stock dividends. Typically, stocks that have a stock dividend rate of over 4% are considered top performers among dividend stocks.

Where to Find Top Dividend Stocks

Dividend Information offers a free list of Top Dividend Paying Stocks.  Ultimately, you want to find a dividend stock that is stable, consistent, in a positive growth industry and belonging to a well managed company.

Evaluating Dividend Stocks

Key Considerations:

  • Industry growth
  • Consistent performance (annual income and the dividend yield)
  • Company management
  • Company age and reliability
  • Relatively stable stock price

Once you have identified the top dividend paying stocks, several other factors must also be considered. First, investors must take into account the stocks dividend history. Older, well-established companies tend to payout a higher percentage then do younger companies and their dividend history can be more consistent. Dividend cover is a useful metric to identify the abity any given company has to pay dividends.

Second, the stock price volatility can greatly affect return on investment for dividend stocks.  While some dividend stocks may pay high dividend yields, fluctuations in stock price can destroy any positive earnings.  Much of the volatility concerns can be alleviated when investors take up a long term investing approach.

Finally, investors should consider the strength and projected growth of the industry, company management, and the balance sheet. Well managed companies in growing industries will continue to payout high yield dividends. 

Currently, many REIT stocks offer the highest dividend stocks. By law, REIT companies, or real estate investment trusts, are forced by law, to pay 90% of their annual income to stock owners as dividends and thus many stock holders of REIT shares find high dividend yields on their investment.

Evaluating Dividend Stocks for Different Industries

Apart from REIT stocks, there are many other types of stocks that are currently earning high dividends and are ones that you should consider. Presently, energy, banking, and finance industries are all paying out higher dividend rates than stocks in other industries.

Find more information on dividend calendars, reliable dividends, top dividend stocks.