When do you sell a dividend stock?
Some investors love dividend stocks so much they will never sell.
But if your goal is to generate a consistent growing income, knowing when to sell can be tricky.
After all dividend stock prices can fall and dividends can get cut… so what then?
Here are three warning signs to look out for to know when to sell.
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Can you believe it's ‘Januworry' again?
I honestly think there's nothing worse than the point when your bank account tells you, you had just a little too much fun over the December holidays.
Thankfully, 2020 could be the very last January you ever feel this way - IF you make this pre-emptive strike today.
The man who bo... ››› more
2020 has barely begun yet we're already set to be flooded by hundreds of companies set to report financial results between February and March.
Results releases are even more important for small-cap and penny stocks.
That's because these companies don't have as much interest from institutional analysts - so results announcements are the main way for news about these companies' potential to ... ››› more
In November's issue of the South African Investor, I warned readers about two types of “danger” shares lurking on the JSE.
One of these types is called the “High-Yielder”.
Simply these are shares that sit on suspiciously high dividend yields.
You've probably heard me speak about these “income-traps” before, but in the South African Investor, I went further and reveale... ››› more
You can spend a lot of time searching for stocks to buy.
You can study for hours and learn how to analyse stock charts and company's balance sheets. You can spend hours going over financial statements.
But if you're like a lot of people, you don't have the interest or the time. You've got a job and a family, and they keep you busy.
The good news is there's a shortcut around doing all t... ››› more
Q. “My question is really basic and so please bear with me… I have been wanting to invest in shares for the last three years and I would very much like to receive dividends as a passive income. Could you please explain what dividends are exactly and why a company would pay dividends to shareholders?”
A. I am always happy to answer these questions, because we all have to start somewhere w... ››› more
There are many different ways to make money from cryptos…
You can invest in them.
You can trade them.
You can even make money through arbitrage, which is when you buy and sell a crypto simultaneously to take advantage of the price difference.
But did you know you can actually make passive income from cryptos?
I'm talking about…
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There are 275 dividend paying shares in the JSE today. They average a dividend pay-out of 3.88%.
While a 3.88% dividend is surely better than nothing - this doesn't even cover the interest you'd have received on your cash with a fixed deposit.
And, once that money is paid out by a company the money is lost to it forever.
But what if I told you there's a better option - a company that d... ››› more
As you may know, many shares pay dividends. A dividend is a portion of a company's earnings that it pays to its shareholders. Usually this payment happens once or twice a year.
And because they offer this added benefit of a regular income stream, income-seekers love dividend-paying stocks.
But occasionally, companies surprise investors by electing to pay a ‘special dividend'.
Special... ››› 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
Imagine investing R100,000 in a company and receiving over R600,000 in dividends alone…
Or investing the same amount and getting back nearly R200,000 just in dividends…
Now that's serious income that could guarantee a comfortable retirement. Now imagine owning six of these shares right now…
I'd call that the ‘Ultimate Paycheque' retirement.
And as I said, I've identified si... ››› more
It's no secret that if you are investing for your retirement, you want to have income producing stocks in your portfolio.
And by income producing, we mean shares that pay consistently high dividends.
But looking at the dividend yield alone, may show x but it could mean y….
Instead I want to show you a far more RELIABLE way to calculate the real dividend yield, so that you can invest... ››› more
Generating consistent income is a wonderful way to grow your wealth. And one of the best ways to make consistent income is with dividends.
However, finding the right companies that can consistently pay you dividends every year isn't all that easy.
Unfortunately, you'll get companies that pay-out most of their profits in dividends. Eventually, they won't be able to sustain this. This happen... ››› more
Q. “I want to start to trade Crypto-currencies. I heard that I don't need to worry about ECNs ever again. I don't even know what an ECN is, let alone worry about them. Could you explain this in layman's terms. I find that the definitions on the internet, are far too complicated to understand?”
A. I'll try to explain what an ECN is with an easy to understand analogy.
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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
The most common argument you hear from investors who aren't interested in dividends is that the company should be able to find something better to do with its cash than give it back to shareholders.
They say the funds should be used to grow the business either by investing in the business itself or by acquiring new ones.
These are valid points but here's where they are wrong…
Recomm... ››› more
From mid-2002 to mid-2017, the JSE All Share returned a cumulative 420%.
Doesn't sound too bad, right?
But if you had re-invested dividends, the return would be over 700%
Just think about that for a second…
That's an extra 300% growth thanks to simply reinvesting the dividends.
To put it another way, R10,000 back in mid-2002 would be worth over R50,000 invested in the JSE. Bu... ››› more
Q. “I'm looking for a downloadable charting platform to set up my charts when I trade… Which user-friendly charting platforms do you recommend and why?”
A. The best way to sign up to a trading charting platform, is by going directly to the platforms' websites.
You'll find that these charting platforms work on a yearly subscription basis, which you'll need to renew and even upgrade ea... ››› more
Dividends can make you massive returns.
If for instance you bought Adapt IT in 2009, you'd have paid 44c per share. Since then the company has paid out 81.84cps in dividends - a return of 186% from dividends alone.
Based on the latest dividend of 17.1cps, you'd make 38.8% on your original investment THIS YEAR ALONE.
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Following on the theme of buying shares at a discount, today's company is trading at a discount to its net asset value as well as paying over 6.5% in dividends.
You will get paid to patiently wait for the company's share price to return to a premium to its net asset value (NAV).
The biggest reason for the discount is that it failed to comply with credit regulations in the past. These issues... ››› more
Disclaimer Note that FSP Invest, a division of Fleet Street Publications (Pty) Ltd, is a research house and not a registered broker, financial advisor or financial service provider. Our editors and customer services teams also do not give personal investment advice. The advice in this website is general advice only and may not be appropriate to your particular investment objectives, financial situation or particular needs, so before investing or if in any doubt about your personal situation, you should seek professional advice from a stockbroker or independent financial adviser authorised by the Financial Services Board.
We research our recommendations and articles thoroughly, but disclaim all liability for any inaccuracies or omissions found in this publication.
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.