High Dividend Yield Stock Characteristic
Why Most Fund Managers Prefer This Stock
Summarized Overview
In this article, you'll find information about how high dividend stocks had performed and why high they are so attractive and favored by many investors.
You'll also find information on what you can expect and some precaution when dealing with this type of stocks.
How High Dividend Stock Had Performed
High dividend yield stock is often viewed as a boring pick. It offers low price volatility and charged at premium price compared to penny stocks. To tell you the truth, you won't get-rich-quick with these stocks.
But most, earnings are expected to grow between 10 per cent and 15 per cent annually over the next five to ten years.
So, over time, you can expect their share prices to move up at about the same rate.
Combining the expected price appreciation (though no guarantee) with two to five per cent dividend yields, you can expect annual returns in the 12 to 20 per cent range, or roughly at 16 per cent. To put that in perspective, at a 16 per cent compounded annual return, $1,000 turns into $4,411 in just ten years!
And that is not even considering if you invest back your dividends!
Let see what make this stocks sounds so good.
Consistent and Generous Dividend Policy.
How often a company pays dividends to its shareholders can be used to gauge the health and profitability of the company.
Has Effective and Committed Management Team.
They are so effective that even if the company is a traditional one and in the maturing stage of its business lifecycle, they are still able to grow. They make themselves relevant all the time by keeping up to date or even ahead of its competitors with their agility, creativity and innovation.
Look around and compare yourself, from who the brains are behind blue chip companies to who are responsible for struggling and dying businesses. You can easily discover the distinction in their attitudes and mindsets.
The management team is the one that determines the financial health, proficiency, competitiveness and resilience of a company. The company’s survival is dependent on how capable the management is in manoeuvring around obstacles and challenges. Well managed companies not only will emerge safe and sound from crisis, but also able to expand their presence and dominance too.
Established in House Research and Development (R&D).
Regardless of the nature a company is doing, a company will still able to outperform the rests and excel in its own field of expertise as long as it invests in R&D. Innovation and creativity will keep them thriving, even if it involved in the most common and competitive business.
Most Preferred by Fund Managers.
A stock that is popular among fund managers is essentially a high potential stock. Their interest provides liquidity, which is important when you wish to buy or sell.
And obviously, these fund managers are professional who do much homework before they commit. This stock will become visible to the market that it is not so difficult to look for information.
Most importantly, high dividend yield stock have in common is its desirable quality.
This is time-tested and proven ability to almost certainly recover from sell-downs in a weak market sentiment.
So, it is not a bad idea to start screening high dividend yield stock. After all, it offer huge potential with many advantages.
But, company that make loans to pay dividend is the stock that you should avoid.
Related Books
The Little Book of Big Dividends: A Safe Formula for Guaranteed Returns (Little Books. Big Profits)
Be a Dividend Millionaire: A Proven, Low-Risk Approach That Will Generate Income for the Long Term
Investors want to be lookout for the top dividend shelling out mutual cash, as dividends have a pretty important portion to participate in any expenditure portfolio.
ReplyDeletePreferred Stock