I know some have made mention on this in past t threads about retirement.

This is something I have never done. Was reading an Motley fool article and it made sense to me as a component of a retirement portfolio. A way to get a paycheck of sorts in retirement.

If you were looking to invest $1000 in five different dividend paying companies who would they be.

Also, how do you purchase them? Do you have to set up a Schwab or Ameritade type account to buy them.

Please spare me the "talk to a professional financial advisor" comments.

Thanks guys and gals.

I'm not an FA. But here's how I view dividends.

Stocks can be an appreciable equity that may yield gains higher than many other types of investments. However, as you know, such investments have associated risks. That being said, the stocks of many companies, especially mature blue chip types of companies, will yield reasonable returns (higher than inflation) over time with relatively low risk.

So, you may include as part of a portfolio, stocks that are relatively low risk but still with sufficient return. Some of these stocks will also offer dividends. Dividend are nice little bonuses that you get while you're waiting the stock to go up. But note that dividends could be used by the company instead to buy back stock (usually increases the stock price) and/or invest in company growth (more R&D, whatever).

Dividends would not be a first order consideration in a stock purchase for me. Perhaps not even second or third order. And the amount is minimal - I don't know, think $1 per share annually. Conceptually, the dividend is pretty small relative to the amount invested (stock purchase basis).

When you think stocks, I would think first about appreciation. Dividends are more like tie breakers between different stock purchase opportunities.

Buy stock through any brokerage account: Schwab, et al.

I use Schwab.

As for dividend stocks, I like:

Apple-pretty consistent with increasing dividends and it's a very friendly price to buy at now with the split last fall.

SPYD-this pays a pretty high dividend.

O-this pays a monthly dividend.

I think there are other stocks that you should be pretty safe with sitting on long term such as McDonalds and Walmart.

I believe the general rule is if you don't do anything but let the dividends reinvest, you should double your value in 7 years or so.

I'm not a FA either, but I'd consider:

Altria MO

Exxon Mobil XOM

ATT T

Abbvie ABBV

Lowes LOW


Lots of good dividend stocks out there!

ATT pays a pretty decent and consistent 7% in my experience.

NuStar Energy LP currently pays 8.47% dividend yield.

Walmart currently is at 1.6% dividend.

I hold a fair amount of Walmart, have for years and it has been good. I sold half Walmart my position in Jan 2018 at $105 and put into Amazon at $1200.

I currently only hold 4 individual stocks making up 7% of my portfolio; Amazon, Walmart, Verizon, and AT&T.

I also have 6% in ETF funds (exchange traded retirement funds).

The remaining 87% is in 19 different mutual funds

O pays a good dividend but with the covid issues affecting commercial real-estate the stock price has been volatile the last year or so but seems to be settling down.

Also 'MO' (Altria Group, Inc) has a good dividend record and is a solid stock.

Other than that utilities in general pay pretty good.

I am an FA...

Historically blue hairs buy blue chips.

Banks, utilities, and companies that are not in growth mode (3M, P&G, etc) are the most popular.

True Dividend payers generally don't grow much in share price. Investors buy them for the dividend.

Keep in mind that Dividends are taxed at Income tax rates. You will get a 1099 every January/February with the total amount of income you received. Keep this in mind as Uncle Sam will want a check in April each year.

Actually, most dividends will be taxed at long term capital gains rates as qualified dividends. If your AGI is high enough though, you will pay an additional 3.8% on investment income which includes interest and dividends.

Schwab and TD Ameritrade are the same company now, but yes, you would open an account with the brokerage firm of your choice. The stocks will be held in the firm's name, not yours, so the company whose stock you buy will have no clue you own it. The brokerage firm handles the record keeping and dividend distributions.

There is the option of having a stock certificate issued to you which shows how many and what class of shares you own in the company. In this case, the company knows who you are, sends dividend checks and other communications directly to you. Some companies used to have an option for small investors to purchase shares directly from them without using a broker, but I don't know if they still do that. I have one stock certificate issued in my name. It's 100 shares of Enron I have framed as a reminder of the old saying, it isn't worth the paper it's printed on.

Also keep in mind a way to accomplish much of what you want with many advantages would be to look at the dividend paying mutual funds. Especially in smaller investment amounts these can hold some advantages.

Take a look at the dividend yield of a few stocks you're interested in (it's usually listed in the stock data on any of the financial sites). One example of a stock I own, BP, the current yield is about 5 percent. Historically it was higher but like many companies they cut dividends during COVID. That's a pretty good return, but of course there are no guarantees!

Thank you guys. That is all very helpful.

All the info above seems correct to me.

I bought Enterprise Product Partners (EPD) in December. Check out it’s history. It appears to be consistent which is what I was looking for. The price per share hasn’t changed more than $1.50 since I bought it and it was reasonable enough to justify the purchase. So far I’m ahead.

I would be watching for possible changes to the taxes in the future. Our current administration appears to be bent on making everything unprofitable.

Motley Fool takes credit for developing Dogs of the Dow theory. In a nutshell it is buying an equal mix of the 10 highest percentage div paying stocks listed on DOW. When dividends get back to normal your stock has gone up. Google has much info as does MF website

I've been investing like this long before I ever heard of the Gardner brothers and have done very well.

If you want income, some financial engineering may be called for. Look at the following. You can also look at others of the types similar to these.

AGNC
NLY
PFL
QYKD
ARCC

Some more "regular" high div yield stocks
FRO
NAT

Generally speaking none of this is widows and orphans type stuff. But with the governments beating interest rates down to nothing, if you want real income, it's not going to be in riskless investments.

Open an IRA with TD Ameritrade or other reputable big name.
Buy/sell within that, and Uncle Sugar can suck it until you actually withdraw money during retirement.
Otherwise he just loves taxing dividends as stated above.

Morningstar1

Morningstar2

Look into ABBV, LOW, HD, PG, WMT, MCD and DIS.
Solid dividend payers as well as potential capital appreciators.

quote:

Originally posted by old rugged cross:
Also, how do you purchase them? Do you have to set up a Schwab or Ameritade type account to buy them.

You have to open an account at one of those places (choose one that offers commission-free trades) and then place money in that account from which you then buy the stocks and hold the stocks in that account. You might have to tell Schwab or whomever what you want them to do with the dividends.

Just google "dividend stocks" for recommendations.

I track 35-40 of the highest quality dividend paying stocks. Of the 37 on my list, 30 are currently overvalued according to my measures. The market of stocks is generally overvalued. Now is not the time to buy blindly on internet recommendations.

EDIT - I would dive into some books to learn about picking individual companies. For books focused on dividend investments, I like "The Single Best Investment" by Lowell Miller.

There are also incredible resources available online, such as the Seeking Alpha community and some of their writers. The CCC List now maintained by Justin Law has an absolute mountain of data- https://www.dripinvesting.org/tools/tools.asp

If you are just seeking high quality quarterly dividend income that you don't have to actively manage, perhaps an ETF might be the way to go. Conduct your due diligence on SCHD - I have found it's focus to be very much in line with my own of high quality companies that grow their dividend.

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