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Help for a novice: is percent dividend payout a helpful factor?

Posted on 2/15/15 at 11:48 am
Posted by islandtiger
Baton Rouge
Member since Sep 2012
1787 posts
Posted on 2/15/15 at 11:48 am
My wife and I are finding that we are sitting on a good bit of cash since some high-performing bonds have been called. We will use some to catch-up our IRA contributions (generally market-tracking mutual funds), but are thinking of purchasing individual, large cap stocks that pay dependable dividends. As I am doing research, I am thinking that low payout rates (below 50%) might be some indication of future dividend growth. Should that be a factor in my decisions?
Posted by TheHiddenFlask
The Welsh red light district
Member since Jul 2008
18384 posts
Posted on 2/15/15 at 2:52 pm to
I normally steamroll high yield dividend stock threads, but since you seem to be doing good homework, I'll play nice.

You are correct and that should definitely come into play.

With that said, please be aware that investing as a novice is a very dangerous activity.
Posted by FT
REDACTED
Member since Oct 2003
26925 posts
Posted on 2/15/15 at 4:56 pm to
Posted by bovine1
Walnut Ridge,AR via Tallulah,LA
Member since Dec 2004
1282 posts
Posted on 2/15/15 at 5:50 pm to
Her are some large cap dividend stock cefs you may want to research. All are currently at a discount, some over 10%. BDJ and CII have 0% leverage. These are modestly imo leveraged-GPM,LCM, and GAM. I just thought these may interest you fwiw.
Posted by islandtiger
Baton Rouge
Member since Sep 2012
1787 posts
Posted on 2/15/15 at 8:14 pm to
Thanks to all for the advice/warnings. We are not going to jump into anything but when we are losing 5-6% return on tax-free TX school bonds as they are being called, we are looking for a reasonable alternative. I have started to pull together a list to winnow down to 5-10: IBM,CSCO, PEP, PG, AAPL, MSFT, JPM, BA, GE, HON, HD, VFC, KMI, AXP, KO, XOM, OKE, HCP, T, MAT, ABT, ANTM, STX, LYB, ITW, CVX, COP
Posted by white perch
the bright, happy side of hell
Member since Apr 2012
7139 posts
Posted on 2/15/15 at 9:16 pm to
XOM, jnj, v, mo, KO
Posted by matthew25
Member since Jun 2012
9425 posts
Posted on 2/15/15 at 10:26 pm to
T
Posted by TheHiddenFlask
The Welsh red light district
Member since Jul 2008
18384 posts
Posted on 2/15/15 at 10:31 pm to
I'll add that The average idiot here are terrible sources of advice for high yielders.
Posted by 632627
LA
Member since Dec 2011
12771 posts
Posted on 2/16/15 at 3:17 pm to
For long term holding of large cap stocks look for dividend growth, not current yield. You want a company that has a history of increasing their dividend(5-10%)every year.
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