Dividend paying stocks....

[Afishegg]

I'm thinking about getting my wife into dividend paying stocks (with interest rates so low), I have a few choices. My question is do any of you have dividend paying stocks? Do you have any insight or recomendations?

Here are the choices I am thinking about.

General Electric -GE ($18.79)

Arthur Daniel Midland -ADM ($30.08)

ATT&T ($26.61)

Lowes ($25.08)

I am thinking about getting my wife a gift of about $2K of each of these stocks each. What do you think?

 

[WorkFE]

Fish,

I know of several on here that own individual stocks. All of those I own, for dividend purpose, are old school heavy weights that produce consistently. AT&T, GE and Lowes fall into that category and I own.
I take shots at newcomers on occassion but normally not for dividends. In pop a profit and out. Win more than I lose but the risk is greater.

GL

 

[Nate]

GE Annual Div = $0.56
Yield 3.06%

ADM Annual Div = $0.60
Yield 1.97%

AT&T Annual Div = $1.72
Yield 5.80%

Lowes Annual Div = $0.44
Yield 1.75%

Im not quite sure what the yield is, but from the little I've read and seen lately...
NextEra Energy - NEE ($52.23) Annual Div = $2.00
Yield 3.83%
Conoco Phillips - COP ($68.24) Annual Div $2.20
Yield 3.22%
Lockheed Martin - LMT ($69.87) Annual Div $3.00
Yield 4.29

AT&T looks good.
I would think Birch may be one to ask.

 

[Bullitt]

Just buy DVY. Don't bother with trying to build a portfolio full of stocks.

 

[Birchtree]

With a portfolio full of stinky stocks you have the potential for capital gains - dividend increases are gravy. I'm currently buying stocks to enhance my revenue streams.

 

[James48843]

I'm thinking about getting my wife into dividend paying stocks (with interest rates so low), I have a few choices. My question is do any of you have dividend paying stocks? Do you have any insight or recomendations?

Here are the choices I am thinking about.

General Electric -GE ($18.79)

Arthur Daniel Midland -ADM ($30.08)

ATT&T ($26.61)

Lowes ($25.08)

I am thinking about getting my wife a gift of about $2K of each of these stocks each. What do you think?

If you buy them for me, I promise to do the laundry for six months, and I can cook too.

 

[ocean]

I submitted Form TSP-77 to transfer my TSP to an IRA account last week, and hope it will be completed in the next 30 days or so as someone on the board here had mentioned. I will then invest the entire amount into some selected stocks and ETFs which it will pay out dividends. I am looking for companies that continue to grow and pay decent dividends.

Here are the first 10 candidates that I had identified and will be purchased when the fund is transferred.

1. ABT – 3.8% (annual dividend)
2. AGG – 3.54%
3. CVX – 3.2%
4. ED – 4.4%
5. HYG – 8.68%
6. IEF – 2.98%
7. JNJ – 3.5%
8. KO – 2.7%
9. MCD – 2.8%
10. MO – 5.8%

The combined average yields will be about 4.1% as of today. My plan is to continue to build this portfolio and reinvest dividends back into the stocks and ETFs until sometime in the future that I need the dividends to supplement as my monthly income. I hope this plan will work out.

Ocean

 

[KevinD]

If the value of the stock price goes down...does that mean the dividend also goes down?

In other words, is the dividend a percent of the value of the stock or is it a fixed amount?

TIA!

 

[Mista_Magee]

I submitted Form TSP-77 to transfer my TSP to an IRA account last week, and hope it will be completed in the next 30 days or so as someone on the board here had mentioned. I will then invest the entire amount into some selected stocks and ETFs which it will pay out dividends. I am looking for companies that continue to grow and pay decent dividends.

Here are the first 10 candidates that I had identified and will be purchased when the fund is transferred.

1. ABT – 3.8% (annual dividend)
2. AGG – 3.54%
3. CVX – 3.2%
4. ED – 4.4%
5. HYG – 8.68%
6. IEF – 2.98%
7. JNJ – 3.5%
8. KO – 2.7%
9. MCD – 2.8%
10. MO – 5.8%

The combined average yields will be about 4.1% as of today. My plan is to continue to build this portfolio and reinvest dividends back into the stocks and ETFs until sometime in the future that I need the dividends to supplement as my monthly income. I hope this plan will work out.

Ocean

Thanks for posting this info. Which investment firm did you choose? I recently did the same thing except I chose monthly transfers and opened the IRA with Vanguard. Once TSP receives the TSP-77 the transfer should be completed within 30 days, more like two weeks. You will receive a message on your TSP account on line on the day the transfer is complete. It takes about 8 days after transfer before I receive a message from Vanguard that the funds have been received, then there is another 3 or 4 day wait before the funds are availabe for trading. I am gradually converting the IRA into a Roth IRA. So far, I have: SLV, IAU, CSX, VHT, VDE and AAPL. I was maintaining until last week when the market plunged. At this time, I don't want to know how far down I went. ABT, JNJ and MO are on my list for the future.

So far, my transfers are always made when the market is at it's lowest point and while I am waiting for the funds to become available in my account with Vanguard, the market goes up 5 - 8%. That's an automatic loss unless one can manage to hold off until the market goes down again. It always does after I have invested my funds. How far into the future do you think you might wait before you use your dividend income to live on? Does one pick and choose which investments they want to receive the dividends from or does one have to choose all or none? I would think picking and choosing would be a tough decision to make. This is a decision I will have to make at some point if I am ever to enjoy some of my TSP. Keep us posted on your moves and activity in the future.

Birchtree, if you read this, at what point do you plan to use your dividend income? Do you know the answer to the question I posed above? By the time I use mine, I don't expect to have acquired very many shares. Looking a two to three years out. Thanks.

 

[ocean]

Kevin,

The dividend would normally stay the same even the stock price dropped for a long period of time (months or years) for most quality stocks. So it would benefit for dollar-cost averaging (DCA) with dividend reinvested on the underline stock.

Mista,

Thanks for the useful info on the TSP transfer. I have an account with Schwab. The commission fee is $8.95 per trade and they have dividend reinvest feature without additional cost. To answer your question, I will not touch the dividend income for another 3 years until my wife retires at that time from her current job.

For long term investment, I finally realized that DCA with dividend reinvested would be the best way to go (echo with Birch) but no margin play. IMO, there is really no particular entry point for long term dividend reinvest strategy. The key point is how you pick your stocks. However, for seasonality, the months of Nov and Dec which stocks normally would go up, particularly in the pre-election year. I would start buying in October this year if I could.

For DCA to work, dividend payout stock is a must. As for stocks selection, I would definitely look for companies that pay dividend and continue to grow. Here are the categories:

1. Cyclical: ABT, JNJ, KO, MCD and MO
2. Utility/Energy/Oil: CVX and ED
3. ETF bond funds: AGG, IEF and HYG

This is how I constructed my core positions posted previously and I think it would be a good mixed which covered cyclical, utility/energy and bond equivalent ETFs.

The forth category that I like is REIT. REIT tends to pay higher dividend with less growth because most of the earnings are allocated for dividend payout. But it will be a good addition when your portfolio becomes larger and you want more diversification. One stock that I like is NLY and it pays 13.7% as of today.

Ocean

 

[Birchtree]

The nice touch about dividend reinvestment is that it repeats every three months and the income will increase as more stock is purchased. September is one of my big months with around 75 dividend payments - 15 are due on 9/30. I was planning to use my dividends to make a mortgage payment on a lake house. I'm now on the come back trail again - so I'll have to wait awhile before using the income for lifestyle.

 

[ocean]

Just checked my TSP account, my partial withdrawal was disbursed on Oct 5 and it will take about 10 business days for the check to be sent to my IRA account. I already created a buy list and once the check gets clear, I will setup my income portfolio and let it run.

My buy list includes ABT, AGG, CVX, ED, IEF, JNJ, KO, MCD, MO and PFF. The combined average yields is about 4% and I think this is good enough to get started.

My remaining balance from the TSP account will be switched to C fund and hope to catch the year-end rally from this point.

Ocean

 

[ocean]

My IRA account just received the transferred check from TSP and I was able to place some stocks purchased today. I will complete my buy list in the next few days. After that I will sit back to watch this portfolio to grow and collect dividends at the same time. The whole process of transferring from TSP to IRA account took about 3 weeks and I am glad that I don't need to wait that long.

Ocean

 

[bmneveu]

My buy list includes ABT, AGG, CVX, ED, IEF, JNJ, KO, MCD, MO and PFF. The combined average yields is about 4% and I think this is good enough to get started.

I personally own KO and believe now is a great time to buy. It made a new 52-week high recently, currently in an attractive dip, low volatility, doesn't move with all the political/world news very much.

EDIT: KO is also posting earning next week which should give it a nice boost!

 

[ocean]

KO definitely is on my buy list and its continued growth of dividend is very attractive. Berkshire Hathaway owns 8.7% of the stock with 200 million shares. Can't go wrong with it.

 

[Mista_Magee]

My IRA account just received the transferred check from TSP and I was able to place some stocks purchased today. I will complete my buy list in the next few days. After that I will sit back to watch this portfolio to grow and collect dividends at the same time. The whole process of transferring from TSP to IRA account took about 3 weeks and I am glad that I don't need to wait that long.

Ocean

At least you didn't have to wait another 3 days for your brokerage to make sure the TSP check was good. My funds are unavailabe for trading for at least 3 days unless I speak to a "live" person to place the trade.

 

[Afishegg]

Can someone give me an idea of how much we are talking about when we talk about "dividends"? I am interested in this subject but according to my own understanding dividends are usually very low maybe tens of dollars or less for a few thousand dollars worth of shares. Say I pick 5 dividend paying stocks and buy 5k$ worth of each for a total of 25k$ portfolio to start off, what would each dividend payment on each individual stock look like. I'm just curious because I really am thinking about doing this soon.

 

[RealMoneyIssues]

...unless I speak to a "live" person to place the trade.

Ouch, if I did that my trade would cost $50 instead of $8 online...

 

[Mista_Magee]

Ouch, if I did that my trade would cost $50 instead of $8 online...

The first 20 trades in a year are $7, doesn't matter if online or "live" person. After 20 trades even online it's something like $30. For much larger accounts, the cost goes down.

 

[Scout333]

what would each dividend payment on each individual stock look like. I'm just curious because I really am thinking about doing this soon.

Fish, Every stock is different. Some pay no dividends, some pay low yields, some pay higher. No guarantees they will continue paying what they have in the past. Generally, the higher the yields the higher the risk. Suggest doing a little research. Advisers such as the Motley Fool usually will list their top ten dividend paying stocks. Utility stocks such as Southern Company, etc. usually pay in the 4-5% range and are fairly consistent in good times and bad. Probably wouldn't want to put all your eggs in one industry basket. When you get more comfortable with your investing you may want to look at REITS such as Annaly Cap. (NLY) which is paying around 15% right now but is a higher risk investment because it is very interest sensitive. Also, a lot of dividend paying companies have dividend reinvestment plans which purchase additional shares at no or very low fees. Good Investing!