Investing 101: Dividends

What are dividends? A dividend is the distribution of some of a company’s profits or earnings to its shareholders. Dividends are generally paid out on a regularly scheduled basis, this typically happens quarterly. Not all companies pay dividends though so this is something important to look out for in the stocks your choose to invest in.

Companies that pay dividends are usually the larger, more established companies with more predictable profits. These companies are often in the banking, utilities, or oil and gas industries. Because growth is generally slower in these industries compared to the technology or biotech sectors, they use dividends as a way to attract investors. Dividend payments vary in amount from company to company, they can even vary in the same company but they are usually between 1%-5%.

Choosing a dividend stock can be tricky because you want to balance a good dividend yield with a strong company that has a stock price that could still potentially rise in value. Chevron (CVX) is one of the best value dividend stocks because of it has a long history of dividend growth. Chevron currently offers a dividend yield of 5.11%. The pharmaceutical company AbbVie (ABBV) has 8 successive years of dividend growth with a dividend yield of 4.73%. Verizon (VZ) has a dividend yield of 4.38% and it has raised dividends in the past 8 straight years.

What are your thoughts on dividends? Do they help influence you to choose a certain stock to invest in? Leave me a comment and let me know your thoughts on dividends. Don’t forget to follow my blog so you can stay up to date on the latest investing news.

Photo by Sharon McCutcheon on Unsplash

Author: vancealm

Working as a manager within two of the largest retail companies for the past 7 years has given me insight into consumer trends and essentially what people are buying on a normal basis. Why is that useful? Because it gives me a better understanding of the established and growing brands and companies that could potentially work to make YOU money. My name is Vance Alm and I am currently working on earning my MBA from the University of Nevada, Reno. I want to talk, teach, and find out more about investing in the stock market. Recently, there has been a lot of news around the stock market, hedge funds, and normal retail investors which has reignited the nation’s curiosity about investing their money. A lot of people want to be involved with the excitement of potentially making money by investing in the stock market, but they don’t know how or even where to begin. I want to explore the world of investment banking with you and talk about everything involved, from researching different companies to invest in, to the different online platforms or financial service companies you can use and everything in between. I am not a wealthy hedge fund manager and I am not an expert in the field, but I am passionate about the idea of having your money work for you. I am always learning more on the topic and I want to open the conversation on how to start investing and what companies to potentially invest in.

One thought on “Investing 101: Dividends”

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s