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re: Dividend Stocks
Posted on 1/29/19 at 4:28 pm to Sho Nuff
Posted on 1/29/19 at 4:28 pm to Sho Nuff
I am new to the dividend world. If I buy 1000000 dollars of CiM, and it is paying a 10% dividend, I will get paid 100000 in quarterly payments. Is that correct? What are the main risks with these stocks? Thanks
3
Posted on 1/29/19 at 4:39 pm to Rebel12
quote:No, the dividend yield percentage of 10.5% is annual. So you'll get about $25,000 every three months.
I am new to the dividend world. If I buy 1000000 dollars of CiM, and it is paying a 10% dividend, I will get paid 100000 in quarterly payments. Is that correct? What are the main risks with these stocks? Thanks
With that money, you can cash a check for that amount or you can reinvest. Most people reinvest to buy more shares so that their dividend machine keeps growing stronger.
That said, if you have a million dollars, buy real estate instead of a real estate stock.
I like CIM. I found it on this board a couple of years ago. I think I'm about to get my 5th dividend from them (so I haven't held it that long).
My initial purchase was just in the low four figures, but it's growing, and the stock price itself is appreciating slowly.
It's not for everyone, but it seems to be pretty stable. Rising rates hurt REITs on the whole, but honestly it's held up well.
Posted on 1/29/19 at 4:41 pm to Rebel12
quote:
If I buy 1000000 dollars of CiM, and it is paying a 10% dividend, I will get paid 100000 in quarterly payments.
Dividend yield is an annual figure
So $1,000,000 * 10% Dividend Yield = $100,000 per year
So if it is quarterly dividend $100,000 / 4QTR = $25,000
quote:
these stocks?
When you buy stock, you are buying the right to future profits generated by the company. The distribution of these profits are done via "dividend" to shareholders
Eventually, all stocks will eventually become "dividend stocks," otherwise they would have no value as you are paying $ for no future profit
quote:
What are the main risks with
The major risk is company specific but there is also an interest rate sensitivity aspect depending on how much of the value is based on a strong, stable dividend history
quote:
CiM
For REITs, the risk is often related to real estate markets, interest rate environment and management competence
Posted on 2/13/19 at 10:10 am to Zilla
quote:
XOM @ 4.5%
XOM at $68 was such a safe no brainer... EVERY TIME, if it ever goes below $70 you should buy as much as possible, it's wont stay there... the divi is lagniappe...
I'm up 12% in 2 months and it was pretty much almost as safe as cash when buying it @ $68
Posted on 2/13/19 at 7:38 pm to EveryoneGetsATrophy
AT&T is returning 6.84% on the dividend. The stock itself should also go up close to 50% over the next 3 years.
Posted on 2/13/19 at 8:08 pm to LSUtotheCore
quote:
AT&T is returning 6.84% on the dividend. The stock itself should also go up close to 50% over the next 3 years.
VZ is better.
Posted on 2/13/19 at 8:36 pm to Rebel12
quote:
What are the main risks with these stocks?
well so one thought on it is to only pay a dividend and give back the cash if you don't feel like you can earn earn 1 for every 1 you have left over for dividends.
These stocks typically don't grow drastically however the great ones pay more dividends each year. and if you reinvest your dividends the growth becomes substantial.
However you aren't going to go up 40% in a day you'll earn a steady 6 or so percent a year with some appreciation over time as well.
Another play all together is dividend growth which I think is where the real dividend money is made over time.
your buying stocks that pay a lesser dividend today but are growing it fast as they've reached that cash cow stage of life where they have more money than they can reinvest in themselves. these tend to have decent price appreciation as well as getting yourself a 10% raise every year. with a reinvestment regularly and through the dividend these can grow substantially over time. Selection and study is key to a good result here though as things can go south and those dividends stop growing or even go away at times.
Posted on 2/14/19 at 8:28 am to LSUtotheCore
quote:What's your rationale? 5g?
AT&T is returning 6.84% on the dividend. The stock itself should also go up close to 50% over the next 3 years.
Posted on 2/14/19 at 9:05 am to leoj
quote:Yields can be deceiving though since a major drop in stock price (like MO) often results in a major increase in the yield even if the dividend payout amount didn’t change.
T and MO yields are ridiculous at this point.
Posted on 2/14/19 at 6:47 pm to EveryoneGetsATrophy
The challenge I am beginning to envision on the relatively near horizon is holding a lot of income paying equities in taxable accounts is going to really restrict a tax efficient method of converting TIRA, 401k/403b, and or R/O-IRA funds in order to minimize big taxation when RMDs start. Combine that with other investment or employment income streams it is very hard to enact conversions that make sense. I now understand why it can make much more sense to have tax managed equity funds, ie have zero to very little income generation, instead of high dividend stocks. Plus state tax drag ain't free. Maybe it's a 1st world problem, but damn.
Posted on 2/14/19 at 7:15 pm to tirebiter
that's why I keep all high dividend stocks in my Roth
Posted on 2/15/19 at 3:50 pm to TigerintheNO
quote:
that's why I keep all high dividend stocks in my Roth
Yes, me too, but there is only so much one can put in a Roth and often the traditional is much better tax option on the front end. My Roth is about 1/3 the size of my traditional pre-tax retirement assets, and then taxable accounts are roughly 50% of financial assets. IRS definitely owns > 25% of many retirees retirement accounts.
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