- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
I'm looking into investing based on dividends...
Posted on 6/7/17 at 10:30 pm
Posted on 6/7/17 at 10:30 pm
I'm looking for the best marker on a stock that would give me the highest yield per payout.
Some of the higher percent yield div stocks pay quarterly, so the percent is divided by 4. But there are some companies that have 2% yields with higher payouts per share.
For example, SNR has a 10% annual yield, but an Italian telecom company, IT.A, has a 2% yield, and based on the payout per share, IT.A seems to be a better dividend play.
Some of the higher percent yield div stocks pay quarterly, so the percent is divided by 4. But there are some companies that have 2% yields with higher payouts per share.
For example, SNR has a 10% annual yield, but an Italian telecom company, IT.A, has a 2% yield, and based on the payout per share, IT.A seems to be a better dividend play.
10
Posted on 6/7/17 at 11:19 pm to tuptiger
I honestly don't understand what you are asking. The yield for stocks is always represented as an annual percentage, should be very straight forward.
Of course as actual investments there are reasons why businesses have higher yields compared to their peers. Dividends are never guaranteed.
Of course as actual investments there are reasons why businesses have higher yields compared to their peers. Dividends are never guaranteed.
Posted on 6/7/17 at 11:29 pm to UltimaParadox
IT.A pays a dividend at 2.82% yield. It works out to .22/share.
SNR pays a dividend at .26/share at over 10% yield.
If you invest 10k in IT.A, at its current price, 7.83, you get 1277 shares. If you multiply the number of shares by the payout per share, you get a 280.94 return on investment.
If you invest that same amount in SNR at 9.70, you get 1030 shares, you get a 267.80 return on investment.
SNR pays quarterly so it works out to a 3.2% yield per dividend, but that's still higher than the yield on IT.A even though you get more money in theory. I understand the difference the share price, but the yield is a percent.
Mathematically, I just assumed the ROI would be greater buying SNR, but it's not.
I'm curious about dividend capture. And I don't want to plug in payout/share everytime to calculate the theoretical yield on an investment. I didn't know if there were a marker that was more beneficial.
SNR pays a dividend at .26/share at over 10% yield.
If you invest 10k in IT.A, at its current price, 7.83, you get 1277 shares. If you multiply the number of shares by the payout per share, you get a 280.94 return on investment.
If you invest that same amount in SNR at 9.70, you get 1030 shares, you get a 267.80 return on investment.
SNR pays quarterly so it works out to a 3.2% yield per dividend, but that's still higher than the yield on IT.A even though you get more money in theory. I understand the difference the share price, but the yield is a percent.
Mathematically, I just assumed the ROI would be greater buying SNR, but it's not.
I'm curious about dividend capture. And I don't want to plug in payout/share everytime to calculate the theoretical yield on an investment. I didn't know if there were a marker that was more beneficial.
This post was edited on 6/7/17 at 11:32 pm
Posted on 6/8/17 at 7:16 am to tuptiger
Higher dividend with higher payout > lower dividend with lower payout. Although the dividend may be more sustainable in the second scenario, it's still less cash in your pocket each payout.
I'd recommend doing a DDM screen and look for stocks with the highest ratio of DDM-implied price to market price. Now you're getting dividends and a value stock with potential for price appreciation (all else equal).
You'd want to exclude the financial sector in your screen, as they are more likely to trade on a DDM basis anyway. I'd apply the screen to the sectors not known for being "dividend sectors," e.g. ex financials and utilities.
I'd recommend doing a DDM screen and look for stocks with the highest ratio of DDM-implied price to market price. Now you're getting dividends and a value stock with potential for price appreciation (all else equal).
You'd want to exclude the financial sector in your screen, as they are more likely to trade on a DDM basis anyway. I'd apply the screen to the sectors not known for being "dividend sectors," e.g. ex financials and utilities.
This post was edited on 6/8/17 at 9:25 am
Posted on 6/8/17 at 8:14 am to tuptiger
How often does it.a pay?
I'm guessing once a year for your numbers to work out vs quarterly for the other.
I'm guessing once a year for your numbers to work out vs quarterly for the other.
Posted on 6/8/17 at 10:01 am to tuptiger
What's the time horizon for your investment?
Posted on 6/8/17 at 12:29 pm to RJSambola
Even if it paid once, in theory the over 10% dividend is more.
I'm looking to get out as quickly as possible. I'm liking the reverse dividend capture strategy or buying on ex div.
I'm looking to get out as quickly as possible. I'm liking the reverse dividend capture strategy or buying on ex div.
Posted on 6/8/17 at 1:29 pm to tuptiger
You have yo buy it before the ex div date to get the dividend.
Also on the morning of ex div the stock will drop by the dividend amount since that dividend value is no longer attached to that share
Also on the morning of ex div the stock will drop by the dividend amount since that dividend value is no longer attached to that share
Posted on 6/8/17 at 2:45 pm to tuptiger
F, T, XOM for some good paying and relatively stable large cap dividend payers. T and XOM (edit... apparently xom is low right now, buy it) are high right now, not necessarily a good time to buy them if you want to be in and out. F, however, is significantly undervalued at the moment, in my opinion. Great buy for a dividend seeker and you also have quite a bit of upside in equity.
Edit- T isn't as high as I thought. Buy some of that too.
Then use some of your side money in the higher div riskier stocks. If the dividend is ROC, you should read some articles on Return of Capital dividends (different than cash/stock dividends).
Edit- T isn't as high as I thought. Buy some of that too.
Then use some of your side money in the higher div riskier stocks. If the dividend is ROC, you should read some articles on Return of Capital dividends (different than cash/stock dividends).
This post was edited on 6/8/17 at 2:49 pm
Posted on 6/8/17 at 3:03 pm to tuptiger
What exchange is IT.A traded on? Have you considered the impact of collecting foreign dividends and the foreign tax withholding?
Posted on 6/8/17 at 3:12 pm to tuptiger
Sjm pays quarterly, which I do not reinvest
Posted on 6/8/17 at 3:55 pm to tuptiger
Your rationale is a bit off. The only thing that matters is annual percentage yield.
That's how many dollars you're earning per year.
5% yield on $10,000 = $500
That $500 would buy you 50 shares of Ford, but only 3 shares of Netflix. Doesn't matter. Same value.
Using your example:
The same line of thinking applies to stock appreciation: If you put 1k into a $1/share stock and it increases by $1, then you have $2,000
If you put 1k into a $100 stock and it increases by a whopping $10 per share, then you still only have $1,100. Percentages are all that really matter.
That's how many dollars you're earning per year.
5% yield on $10,000 = $500
That $500 would buy you 50 shares of Ford, but only 3 shares of Netflix. Doesn't matter. Same value.
Using your example:
quote:A $10,000 investment in SNR yields you $1,000. A $10,000 investment in IT.A yields you just $200. The only reason the payout per share is better is because you're paying more for each share, thus you also have fewer shares.
SNR has a 10% annual yield, but an Italian telecom company, IT.A, has a 2% yield, and based on the payout per share, IT.A seems to be a better dividend play.
The same line of thinking applies to stock appreciation: If you put 1k into a $1/share stock and it increases by $1, then you have $2,000
If you put 1k into a $100 stock and it increases by a whopping $10 per share, then you still only have $1,100. Percentages are all that really matter.
This post was edited on 6/8/17 at 4:55 pm
Posted on 6/8/17 at 5:23 pm to tuptiger
By the way, depending on how much capital you have available I'd argue it's hard to beat going this route:
Real estate:
O - monthly dividend REIT
CIM - 10% dividend (and seemingly stable) REIT
VNQ - Vanguard REIT
Banks:
JPM - Chase (or any leading bank)
BNS - Bank of Nova Scotia (you can close your eyes and stab at any Canadian bank. They're all great for dividends.
Utilities:
SO (the Southern Company)
DUK (Duke Energy)
D (Dominion Energy)
There are many electric and water companies from which to choose, all with insane payouts.
Telecom:
T
VZ
Can't beat 'em...
Consumer Staples
PG
KO
UL
PM
If you'd like to add stability and diversification buy VYM, the Vanguard high div etf. I think it's just above 3% right now.
And REMEMBER this, it's not so much about current annual payout as it is about STABILITY and FUTURE outlook. Is it sustainable? Just ask Kinder Morgan, ConocoPhillips, or Potash Corp about that. They all had to cut that fat div.
So with that said, you might want to look into dividend growth. While their are many companies that pay just .5 to 1.5% now they might be the next 3-4% players...and their stock would likely appreciate handsomely before they reach "Value" status. I can't say about Ford and Exxon. They're spent.
Real estate:
O - monthly dividend REIT
CIM - 10% dividend (and seemingly stable) REIT
VNQ - Vanguard REIT
Banks:
JPM - Chase (or any leading bank)
BNS - Bank of Nova Scotia (you can close your eyes and stab at any Canadian bank. They're all great for dividends.
Utilities:
SO (the Southern Company)
DUK (Duke Energy)
D (Dominion Energy)
There are many electric and water companies from which to choose, all with insane payouts.
Telecom:
T
VZ
Can't beat 'em...
Consumer Staples
PG
KO
UL
PM
If you'd like to add stability and diversification buy VYM, the Vanguard high div etf. I think it's just above 3% right now.
And REMEMBER this, it's not so much about current annual payout as it is about STABILITY and FUTURE outlook. Is it sustainable? Just ask Kinder Morgan, ConocoPhillips, or Potash Corp about that. They all had to cut that fat div.
So with that said, you might want to look into dividend growth. While their are many companies that pay just .5 to 1.5% now they might be the next 3-4% players...and their stock would likely appreciate handsomely before they reach "Value" status. I can't say about Ford and Exxon. They're spent.
This post was edited on 6/8/17 at 5:32 pm
Posted on 6/8/17 at 8:05 pm to bayoubengals88
I was thinking buy on ex div date then let it run up or buy a few days before and sell on ex div date. The second strategy has built in protection because you could just collect the dividend.
This is short term
ETA: I'm curious about covered calls and dividend trading as well
This is short term
ETA: I'm curious about covered calls and dividend trading as well
This post was edited on 6/8/17 at 8:27 pm
Posted on 6/8/17 at 8:31 pm to tuptiger
Oh ok. There are people that do this. There was one guy on Reddit r/RobinHood but I don't see him pumping it anymore.
Keep looking. Tell us what you find.
Keep looking. Tell us what you find.
Posted on 6/8/17 at 8:42 pm to bayoubengals88
I will update. I'm about to open a Robin Hood ACCT.
But I like the strategy you posted. I'm a proponent longterm of increasing dividend stocks.
I'm looking for a little more risk/reward.
I calculated the other day turning 5k into 6200 in less than a month if you collected only dividends. The stock usually drops the following day, so I like the buying on ex div date theory. You'd just have to do it everyday
But I like the strategy you posted. I'm a proponent longterm of increasing dividend stocks.
I'm looking for a little more risk/reward.
I calculated the other day turning 5k into 6200 in less than a month if you collected only dividends. The stock usually drops the following day, so I like the buying on ex div date theory. You'd just have to do it everyday
This post was edited on 6/8/17 at 8:46 pm
Posted on 6/8/17 at 9:05 pm to tuptiger
quote:it's definitely something I've considered. I also like the 'run up' play.
I calculated the other day turning 5k into 6200 in less than a month if you collected only dividends. The stock usually drops the following day, so I like the buying on ex div date theory. You'd just have to do it everyday
Posted on 6/8/17 at 10:28 pm to bayoubengals88
Look up dividend aristocrats. Some haves,ow growth but they all have been paying dividends for a long time.
Posted on 6/9/17 at 11:03 am to tuptiger
Sounds like a pretty difficult/risky strategy. You are basically betting that the stock price will go up after the ex-dividend date. Plus you need to make sure the dividend plus stock price will cover both ends of the transaction fees.
If the price goes down do you just hold the stock?
If the price goes down do you just hold the stock?
Posted on 6/9/17 at 1:29 pm to UltimaParadox
You can dividend capture several ways. You can buy a day or two in advance and then sell on the day before ex div date. In theory, the stock spikes the day before ex div date and adjusts on ex div date. The benefit to this strategy is if it doesn't spike, you hold the stock and collect the dividend then sell asap.
The second strategy is buying at Price X then trying to sell at price X and collect the dividend. This is the one I like least.
The third strategy is my favorite. Buy on ex div date after the usual price adjustment and let it run up. Most charts predictably rise after the div adjustment. You can usually get the div amount at the very least. It's not income. It's capital gains. Most of the time you actually get more using this strategy.
Div strategies are interesting to me. The 3% gains don't seem like much but you can do it everyday and that 3% done everyday on 5k adds up.
The second strategy is buying at Price X then trying to sell at price X and collect the dividend. This is the one I like least.
The third strategy is my favorite. Buy on ex div date after the usual price adjustment and let it run up. Most charts predictably rise after the div adjustment. You can usually get the div amount at the very least. It's not income. It's capital gains. Most of the time you actually get more using this strategy.
Div strategies are interesting to me. The 3% gains don't seem like much but you can do it everyday and that 3% done everyday on 5k adds up.
This post was edited on 6/9/17 at 1:30 pm
Page 1 of 2
Popular
Back to top
Follow TigerDroppings for LSU Football News