There are two main methods you can use to pick stocks for investing or trading.
I'm talking about terms called “fundamental” and “technical” analysis.
You need to understand the differences between these methods - if you are to use them successfully as an investor…
Use them correctly - and you stand to make big profits. Use them incorrectly and you could lose out big time.
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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
The only way to live a worry-free retirement these days is to have steady streams of income coming in, month after month.
Without income you can count on, you're dependent on your retirement annuity to get by. And that's not a spot you want to be in…
That's why, part of my job as Real Wealth editor, is to find investments that consistently pay investors dividends - as well as - investmen... ››› more
Right now, there's one JSE listed company who has a dividend yield of 57%.
That's unheard of in JSE listed companies. But it's true.
In fact, it could be one of, if not the highest dividend yield I've ever come across from a JSE listed company.
Just consider this…
The JSE All Share's dividend yield is just over 3%. This means, the company has a yield nearly 20x higher than the av... ››› 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
One of the main reasons why you choose to invest a stock is that you believe it'll go up in price over time.
If you're an income investor, another factor you may consider is the dividend the stock pays.
That's why, if a company cuts its dividend, you can be sure its share price will drop. Investors that were in the stock for the dividends will sell their shares.
For example: Take commodi... ››› more
Many investors tend to lose sight of what really counts when investing, especially when it comes to putting cash in the stock market.
Investors overlook the fact that true wealth is measured by your income - not your bank balance.
So what's one of the best ways to receive an income from you investment?
Hint, it's not bonds, gold or even Forex...
Investor's biggest blind spot
Dail... ››› more
If you're reading through financial news reports or company annual statements, you're likely to come across a number of different financial ratios.
Many of these ratios can be very useful in helping you make a decision about whether or not to invest in a company.
So what are the main financial ratios you need to know about? And what do they mean?
Read on to find out…
Four financia... ››› 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
Have your ever watched Bloomberg TV and you just didn't understand all the gibberish that they talked about?
Or, have you ever been at a braai when your friends started talking investing and you didn't have a clue what they were saying. Did you feel like the odd one out?
Well, what if I told you that thanks to four simple numbers, measuring the value of different shares is easier than you th... ››› more
If you're looking for bumper dividend yields, you could search further afield than South Africa.
So where can you look to invest?
Read on to find out…
The link between share prices and dividend yields
When share prices rise it causes their dividend yields to fall.
Company ABC’s shares are trading at R20 each. It pays R1 a year in dividends. That means it di... ››› more
Contrary to what you may believe, a company's dividend yield actually tells you very little about how much it will pay you.
Yes, the dividend yield is your income from a company. And yes, the bigger the dividend yield, the bigger the payments.
But it's not just as simple as that. Especially if the company is a real estate investment trust (REIT).
Let's take a closer look…
How the ... ››› more
Fundamental analysis involves delving through all the available information you can get your hands on about a specific company.
One of the key aspects of fundamental analysis is using financial ratios to unearth what's really going on in a company's financials. And to work out whether it's worthy of your investment.
So what financial ratios should you use?
Read on to find out the key fin... ››› more
When you put money into a savings account, you expect the bank to pay you a rate of interest in return for that.
When you invest in shares, there's also an expectation that your money will earn you a return. Otherwise it wouldn't make sense to risk you money investing.
Your cash would be better off in the bank.
So what sort of ‘interest rate' can you expect in return for investing in a... ››› more
If you're looking for an investment portfolio that pays you an income, you can't look by dividend paying shares.
Investing in well-established, solid companies that pay dividends is a great option. You stand to benefit from twice yearly pay outs from the company, plus capital appreciation over the long-term.
One ratio that can help you weigh up good dividend paying companies is the dividend ... ››› more
If you're investing for dividends, you want to see if a company looks likely to continue paying those dividends into the future.
Of course, there are no guarantees. But there are some things you can check that can give you a good indication.
You can start with looking at a company's free cash flow. Let's take a closer look…
Why look at a company’s free cash flow?
When it comes t... ››› more
Investing in dividend paying shares is one way to produce an income stream when you retire. You can buy the shares and, until you need the dividends for income, keep reinvesting. You can just sit back and watch your holding grow. But you shouldn't just rush out and buy these shares at any price. The price you pay will have a bearing on your return from the dividends. Let's take a closer look…
... ››› more
If you're investing for dividends, you'll need a couple of ratios to weigh up the dividend. So what options do you have? Two ratios worth calculating include the dividend yield and the dividend pay-out ratio. Let's take a closer look at how to calculate them and how to interpret them…
Dividend ratio #1: The dividend yield
The dividend yield (DY) is the percentage yield you get as a dividen... ››› more
If you're looking for companies that pay out good dividends, there are a number of things you can do to help you whittle out the poor performers. The dividend yield is probably the most used ratio when it comes to dividends, but you need to look further than that. You need to check if a company's dividends are sustainable. Let's take a look at how you can do that…
What dividends show
The di... ››› more
If you want a portfolio that pays you an income then dividend paying stocks are the way to go. But what sectors of the market should you look to? Real estate investment trusts (REITs) can offer you high dividends payments. Including a few of these in your dividend paying portfolio could pay off. Let's take a closer look at what REITs can add to your portfolio…
The ins and outs of REITs
Real... ››› more
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Remember: Never invest more than you can afford to spare and that the value of any investment, and the income derived from it, can go down as well as up. The past is not necessarily a guide to future performance.
Editors or contributors may have an interest in investments commented on in this newsletter. However they have signed restraints to prevent the abuse of their position as contributors to this publication.