Last week I received a letter from a Red Hot Penny Shares member asking about dividends from companies in our portfolio.
‘X' asked for the companies that pay the biggest dividends.
But the answer to that question is a bit more intricate.
You see, a company selling at R1 paying a 5c dividend could be more attractive than a R10 share paying a 30c dividend. But the 30c dividend is techn... ››› more
If you have a scan of the JSE you'll find there are currently around 68 stocks with a dividend yield of 5% and higher…
You'll also see that a specific stock, Quantum Food Holdings, sits on a massive 16% dividend yield!
That's right, R1,600 in dividends for every R10,000 invested…
If you invest R10,000 into a fixed deposit today you'd be lucky to get 6% on your money - for R600 in i... ››› more
Imagine this… You could've bought Capitec shares at R26 a share in 2008.
In the past year, the company paid investors R15.75 in dividends. That means 60.50% growth on your original capital JUST FROM DIVIDENDS.
If you add up all the dividends since 2008, investors received R69.88 in dividends. That's 268% growth from dividends alone.
In fact, a study of dividends and returns on shares... ››› more
Dividends can account for a lot of the returns you see from your investments over the years. And high yielding stocks tend to make better long-term investments.
So how can you suss out a company's dividend before you invest?
Read on to find out more…
Weighing up dividends with dividend cover
You have to tread cautiously when investing in shares for their dividends. Just be... ››› more
If you're investing for dividends, it's not a good idea to only look for companies with the highest dividend yields. A high dividend yield can actually be an indication that a company is going to cut it.
It's important to check how sustainable a dividend is.
Let's take a closer look at how to do this…
Using dividend cover to check a company’s dividends
Dividend cover is a popula... ››› more
If you're investing for income, dividends play a vital role in your strategy.
Whilst there are no guarantees that a company will always pay out a dividend, you can check the likelihood of this with some simple calculations.
One of these calculations is the dividend pay-out ratio.
So how can you calculate the dividend pay-out ratio? And how can you use this information?
Read on to find ... ››› more
If you rely on dividend payments for income or reinvest your dividends to help grow your investment, you want to check if they're safe.
Whether a company's going to continue to pay dividends into the future is an important aspect of your investment strategy.
So how can you check the safety of your dividend payments?
One well-used method is checking a company's dividend cover.
Read on t... ››› more
If you're looking to invest for income, you'll want to buy shares that pay out decent dividends. Once you've found shares that pay out good dividends, you'll want to know the likelihood of the company continuing to pay this out. But how can you do that? By calculating the company's dividend cover. Read on to find out how you can do this…
How to calculate dividend cover
Simply put, the div... ››› more
When you invest, keeping things as simple is rarely a bad thing. In fact, complicated strategies employed by some professional fund managers often find it difficult to beat the markets for prolonged periods of time. So what about a strategy that focuses purely on the highest yielding shares? Let's take a closer look at this strategy…
Back in 1990, Michael O’Higgins, in his book ‘Beating th... ››› more
It can be hard to know where to start when you build a dividend paying portfolio. Before you dive in, check out the dividend cover. This key ratio will give you a better idea of the likelihood of a company continuing to pay out dividends. And, of course, this is a must when you're buying shares based on their dividends for the long-term. Read on to find out the importance of dividend cover when yo... ››› more
Dividend investing - buying shares with high dividend yields - can be a very good strategy. It has become a popular way to invest in today's world of rock-bottom interest rates. Read on to find out one way to check how safe your dividend payments are…
Fed up with receiving next to nothing on savings accounts, many people have put some of their money to work in the stock market, Phil Oakley exp... ››› more
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