What dividend paying stocks would you suggest?

[ilovedolphins]

I am just starting to purchase dividend paying stocks in Etrade. I am not sure which ones would be best.

I only have about $600 to invest each month so I know I won't be able to buy a lot.

I am hoping to increase my portfolio by purchasing the dividend paying stocks, as we all are.

[phil5185]

I am hoping to increase my portfolio by purchasing the dividend paying stocks, as we all are.

Wouldn't it be better to avoid dividend stocks and buy growth stocks instead? If I remember - you're still young enough to be in the wealth-building phase rather than taking income from your stocks.

[svwashout]

Any opinions on REITs? Many of these like NLY or AGNC appear to offer some plush yields...

[clarkrl2]

If I had to pick ten dividend paying stocks today, I would use the following listed in order of what I believe to be the best value first:
CVX Chevron Corp (3.21%)
JPM JP Morgan and Chase Co. (3.23%)
XOM Exxon Mobil Corp (2.59%)
INTC Intel Corp (3.61%)
CNP CenterPoint Energy Inc. (3.99%)
CAT Caterpillar Inc. (2.38%)
PEG Public Service Enterprise Group Inc (4.42%)
R Ryder System Inc (3.06%)
NSC Norfolk Southern Corp. (2.72%)
CSX CSX Corp (2.44%)

Just because I like these ten stocks at this time does not mean they would necessarily be good stocks for you. Also I probably make changes to my top 10 more frequently than wxyz. Maybe you could consider using an index etf like SPY, QQQ, or DIA as a place to invest your money until you learn to research your favorite stocks.

Like phil5185 suggested, you might also consider researching some non-dividend paying stocks.

[ModE98]

REITs are higher risk investments. The dividend rate can be reduced at any time. So a 12% dividend could be only 7 or 8% or less, depending upon their ability to obtain funds at very low rates and reinvest for return at a much higher rate. You may be relatively "safe" for the next year, or not. Will Fed start to raise rates, yes, but it's a matter of timing. Investing in REITs is short term. I note that some have been reducing their yields this year.

Long term investing in quality, wide-moat, dividend-paying, and well established and proven corporations is the way to go if one wish to construct a portfolio you can live with though the years ahead, leading to retirement with a steady stock dividend flow. Top corporations are known for their frequent dividend raises through the years. What is annualy yielding 4% now could be nearly 10% or more in 15 years, based on the investment cost "today"/

[Aman A.K.A. Ahamburger]

SU, XOM, KMB, KO, JNJ... SU is a low yield, but a great long term growth story.

[bimetalaupt]

Aug 26, 2012 23:33:59 GMT -5 Aman A.K.A. Ahamburger said:

SU, XOM, KMB, KO, JNJ... SU is a low yield, but a great long term growth story.

One more thing you should use to produce future value of these stocks is to study their future discounted cash current value...aka Intrinsic Stock Value

Example XOM = 189.48
JNJ = 115.47
KO = 142.50
and add a REIT O= 4504.83.. ok that is a little over optimistic...

Try this for details...http://www.valuepro.net/

You will see things like Beta, WACC ,Operating margins used to develop the Intrinsic Stock value..

Just a thought,
BiMetalAuPt

[Driftr]

Aug 25, 2012 19:05:52 GMT -5 ilovedolphins said:

I am just starting to purchase dividend paying stocks in Etrade. I am not sure which ones would be best.

I only have about $600 to invest each month so I know I won't be able to buy a lot.

I am hoping to increase my portfolio by purchasing the dividend paying stocks, as we all are.

If I were starting the way you plan to, I would buy as many shares as $1200 would get you in one of the following 6 every two months for the next year:
PM
KO
KFT or HNZ
DUK or EXC or SO
JNJ
PG
In year 2 I would do the same thing with:
COP or XOM
VZ or T
MCD
INTC
GE
WMT
I'd wait to buy every two months to lower the % that the commission costs will eat up. I would use any dividend proceeds received between purchases to increase the number of shares being bought in the 'next' stock.
At the end of two years I would look to either add more individual stocks that you like, or add to those that have not performed as well as the 10-11 'above' them. Good luck with whatever strategy you decide to follow.

[Deleted]

I would use any dividend proceeds received between purchases to increase the number of shares being bought in the 'next' stock.

Actually a Really smart move if one is young enough would be to set half of the Dividend Paying Stocks up on D.R.I.P.S. {Dividend Reinvestment Plans} - This is Generally a Very Easy and Painless Process which can be accomplished by calling the Brokerage.
With a D.R.I.P Shares (or Partial Shares) are Automatically Purchased with any Dividends that come in on any Items that are set on A D.R.I.P.

Most Brokerage Mark D.R.I.P.s as an Corporate Action - thus No trade fee. A Very Handy, Cost efficient way of both increasing the amount of shares held & Compounding ones Returns.
These also Automatically perform the strategy of Dollar Cost Averaging - Which helps to Moderate your Cost Basis - which is very important When you sell for Tax Liability..

As I said D.R.I.P.s are a very cost efficient way of Increasing not only how many shares you have but also compounding the returns off of the Positions set to that. As Easily as a D.R.I.P can be set up it can be Reversed at any time.
The Real trick of Course to a D.R.I.P (as with any LONG TERM investing plan) is to Ignore the Day to Day Doom and Gloom that Gets spewed forth from the Media, PROs and Analysts..

Also {And this is Important} I would like to take a moment and say that Any "Recommendation" you find here - should be Viewed as an Opinion - Until such a time as you have done your own Research (A.K.A - Homework) and Determined if the Item fits your Risk Tolerance and Investing Goals..

[Driftr]

Aug 27, 2012 13:10:02 GMT -5 @di said:

I would use any dividend proceeds received between purchases to increase the number of shares being bought in the 'next' stock.

Actually a Really smart move if one is young enough would be to set half of the Dividend Paying Stocks up on D.R.I.P.S. {Dividend Reinvestment Plans} - This is Generally a Very Easy and Painless Process which can be accomplished by calling the Brokerage.
With a D.R.I.P Shares (or Partial Shares) are Automatically Purchased with any Dividends that come in on any Items that are set on A D.R.I.P.

Most Brokerage Mark D.R.I.P.s as an Corporate Action - thus No trade fee. A Very Handy, Cost efficient way of both increasing the amount of shares held & Compounding ones Returns.
These also Automatically perform the strategy of Dollar Cost Averaging - Which helps to Moderate your Cost Basis - which is very important When you sell for Tax Liability..

As I said D.R.I.P.s are a very cost efficient way of Increasing not only how many shares you have but also compounding the returns off of the Positions set to that. As Easily as a D.R.I.P can be set up it can be Reversed at any time.
The Real trick of Course to a D.R.I.P (as with any LONG TERM investing plan) is to Ignore the Day to Day Doom and Gloom that Gets spewed forth from the Media, PROs and Analysts..

Also {And this is Important} I would like to take a moment and say that Any "Recommendation" you find here - should be Viewed as an Opinion - Until such a time as you have done your own Research (A.K.A - Homework) and Determined if the Item fits your Risk Tolerance and Investing Goals..

Does Etrade allow for D.R.I.P.? I don't have an account there. Only brokerage I'd heard of that did was Schwab.

[svwashout]

Thanks, so the market is basically saying "enjoy it while it lasts", either the payout is likely to drop or you see capital losses (or both). Such is the price of "reaching for yield". On the other hand I recall back in the early 1980s how people who bought treasury bonds that yielded like today's REITs must have faced the same dilemma. FWIW NLY has about a 15-year history with a 3-yr glitch from 2005 to 2007-ish.

finance.yahoo.com/q/hp?s=NLY&a=09&b=8&c=1997&d=07&e=27&f=2012&g=v

AGNC has very little history to speak of. In today's interest rate environment yields like this stick out but as usual so do their risks as perceived by the market, which now looks rather like the opposite of 30 years ago.

[bimetalaupt]

Aug 27, 2012 14:15:43 GMT -5 svwashout said:

Thanks, so the market is basically saying "enjoy it while it lasts", either the payout is likely to drop or you see capital losses (or both). Such is the price of "reaching for yield". On the other hand I recall back in the early 1980s how people who bought treasury bonds that yielded like today's REITs must have faced the same dilemma. FWIW NLY has about a 15-year history with a 3-yr glitch from 2005 to 2007-ish.

finance.yahoo.com/q/hp?s=NLY&a=09&b=8&c=1997&d=07&e=27&f=2012&g=v

AGNC has very little history to speak of. In today's interest rate environment yields like this stick out but as usual so do their risks as perceived by the market, which now looks rather like the opposite of 30 years ago.

The ride of the Bull market in T-Bonds has been great.. I retired on the profits and still have some Oct 15, 2015 30 Year T-Bonds that pay 10.125%...coupons..It is best to maintain your allocations like Expert 50/50 or BellBar80/20

The three Stocks I talked about all have DRIP and you do not need a single share to start XOM.

Best of Luck,
BiMetalAuPt

[Deleted]

Drftr put his list out there.....and it has a lot of the same stuff i would recommend

Depending on your risk tolerance, you need to figure out what you are trying to accomplish

Growth stocks can appreciate faster than mega cap dividend payers, but most consider the mega cap payers as the safer bet (there is NO completely safe stock)

I try to get both in my portfolio

Majority of money is tied up in mega cap dividend plays...that unless a BP type event occurs, i just keep adding shares to what i already own (the buy and hold buffett model)

But i also have about 20% in higher growth, lower paying dividend stocks (under 2% yields)

If you are like most here, you will make mistakes along the way. Learn from them.....and try not to make the same type of mistake the second time

Know what you are buying....understand the company, and what they do. You dont have to watch them daily, but keep abreast of news about the company. At least every year (more if you have the time) go through your companies and figure out if the reason you bought them is still the same....or if anything has happened that you no longer want to own that particular company

It is your money, and your choices....and getting advice from unknown people on the internet is a crap shoot at best


btw my list of favorites are below

GE
SYY
CISC
DOW
JNJ
XOM

[Deleted]

Driftr - As Far As I am Aware Setting D.R.I.P.s up is Standard and is available at all brokerages.
I know for a Fact that you can do it at Ameritrade and at Optionshouse.

[Aman A.K.A. Ahamburger]

Aug 27, 2012 2:00:18 GMT -5 bimetalaupt said:

Aug 26, 2012 23:33:59 GMT -5 Aman A.K.A. Ahamburger said:

SU, XOM, KMB, KO, JNJ... SU is a low yield, but a great long term growth story.

One more thing you should use to produce future value of these stocks is to study their future discounted cash current value...aka Intrinsic Stock Value

Example XOM = 189.48
JNJ = 115.47
KO = 142.50
and add a REIT O= 4504.83.. ok that is a little over optimistic...

Try this for details...http://www.valuepro.net/

You will see things like Beta, WACC ,Operating margins used to develop the Intrinsic Stock value..

Just a thought,
BiMetalAuPt

BiMetal,

Ah yes great point. Be there with a basket when these companies are being tossed out the window easiest way to maximize profits over the years. You could even sell a few bonds at this time on a nice spread to help with those buys. Always a set ahead sir..

A Great thought BiMetal,

[Driftr]

Aug 27, 2012 17:47:02 GMT -5 @di said:

Driftr - As Far As I am Aware Setting D.R.I.P.s up is Standard and is available at all brokerages.
I know for a Fact that you can do it at Ameritrade and at Optionshouse.

DI. As Far As I Am Aware That Is Not An Option At My Brokerage. But I Am Not With ETrade So I Am Not In A Position To Advise ilocedolphins On It. Great Idea If It's An Option At ETrade Though.

[Deleted]

us.etrade.com/e/t/estation/help?id=1301060000


That Link shows that ETrade has the availibility of DRIPS.

[Deleted]

www.tradeking.com/faqs/accounts/basic#DRIP

TradeKing Has them Availible.

Interactive Brokers Does Not Offer access to them.

After Searching Scottrade's site for an answer to whether they offer access to them I could not find an answer.

I also could not find out From FIDELITY's website if they offer access to them.

www.sharebuilder.com/sharebuilder/help/topic.aspx?categorycode=&faqcode=fapost012#fapost012

Sharebuilder apparently does offer access to them.

www.zecco.com/help/pricing.aspx

Zecco Offers Access to them.

www.optionsxpress.com/about_us/faq.aspx#dividend-reinvestment

OptionsExpress Does Offer access to them - But if you are opneing an Account and transferring Positions set up as DRIPS - they will not transfer as such - You need to Email Options Express to Get them set as such.

www.firstrade.com/content/en-us/accounts/drip

I actually have never heard of Firsttrade, But they Offer access to DRIPS.

personal.vanguard.com/us/whatweoffer/stocksbondscds/brokeragedividendprogram

Vanguard offers Access to them.

[Driftr]

Aug 28, 2012 11:56:05 GMT -5 @di said:

us.etrade.com/e/t/estation/help?id=1301060000


That Link shows that ETrade has the availibility of DRIPS.

Nice!

ilovedolphins - DRIPS is definitely an interesting way to go. Wish I had access to them because I invested a lump sum.

Although if you're going to be investing that $600 every couple months anyways, letting the dividends accumulate and adding them to the $1,200 you invest every second month would allow you greater flexibility to control the different position sizes. Assuming you want to keep them at a relatively equal dollar value over time.

[bimetalaupt]

OK.. Lets talk money... Dividend stocks are for the most part overpriced and will do down when the cycle returns to Chips (IBM,TXN,INTC) and Small Caps...QE3 and increased taxes on dividends will make for a real change in dynamics.. Russel 2000 ? also looks overpriced but could pull back 20% for a real buying season!!!

Just a thought,
Bruce
MMXIVBETA still has a discounted cash value on AAPL of 1150.. Yes that is a Trillion USD!!

D.I and I have talked about this in May!!!

[bimetalaupt]

Aug 28, 2012 14:04:26 GMT -5 Driftr said:

Aug 28, 2012 11:56:05 GMT -5 @di said:

us.etrade.com/e/t/estation/help?id=1301060000


That Link shows that ETrade has the availibility of DRIPS.

Nice!

ilovedolphins - DRIPS is definitely an interesting way to go. Wish I had access to them because I invested a lump sum.

Although if you're going to be investing that $600 every couple months anyways, letting the dividends accumulate and adding them to the $1,200 you invest every second month would allow you greater flexibility to control the different position sizes. Assuming you want to keep them at a relatively equal dollar value over time.

How about saving up to $10,000 first and investing on dips ...like Oct of every year 100%? AS Crammer and I talked about in 2002.. Personally I wish I had more CASH!!!
Again True.. i plan to buy in the buying season of Oct 2012 or hold off until the crash of 2013????

KASH IS KING!!,
BiMetalAuPt

[Driftr]

Seems just as valid as any other strategy.

[bimetalaupt]

Aug 29, 2012 13:35:24 GMT -5 Driftr said:

Seems just as valid as any other strategy.

This is a very old system but does have a good record.. I used it in the old days of full priced brokers..Lehman to be exact..Put the Dividend checks in the Savings Bank and saved up ..

Recall the old sell in May and Go away...I started after I did my MBA buying T-Bonds in May.. Selling in Oct or November!! T-Bonds = 90% cash if you go Margin!!!

It may have not always been the best strategy but I will go with T. Boone Pickens.. " I would rather be a fool with a Plan then a genius without a plan".. It is like going to Lost Wages and betting a one time pass of betting two dollars on black and double if you lose.. A lot of fun and cheaper then going to the shows in New York.. Also the pit boss will give you free food to get you of the tables...

Yes , I did retire at 62 with over a 100% replacement income..What more could I want?

[Driftr]

Aug 29, 2012 14:04:56 GMT -5 bimetalaupt said:

Yes , I did retire at 62 with over a 100% replacement income..What more could I want?

Well if you're out of things to ask for, I could use some help getting the 10 year back at about 4-5%.

[bimetalaupt]

Aug 29, 2012 14:15:20 GMT -5 Driftr said:

Aug 29, 2012 14:04:56 GMT -5 bimetalaupt said:

Yes , I did retire at 62 with over a 100% replacement income..What more could I want?

Well if you're out of things to ask for, I could use some help getting the 10 year back at about 4-5%.

This has been the greatest Bond Bull market in the last 100Years.. I recall reading one of the economic Professors at London School of Economics saying Bonds would outperform Stocks over the next 10 years.....In 1999 we had a negative Equity Risk premium of about 3% now we have a positive risk premium of 4.5% with a total equity potential return of 6% for my 0.748 Beta system of Fun and Run account.

The correlation of Equity return to 30 year T- Bond Interest is a -88.4947540079%

[bimetalaupt]

Aug 29, 2012 14:15:20 GMT -5 Driftr said:

Aug 29, 2012 14:04:56 GMT -5 bimetalaupt said:

Yes , I did retire at 62 with over a 100% replacement income..What more could I want?

Well if you're out of things to ask for, I could use some help getting the 10 year back at about 4-5%.

driftr,
I rechecked my numbers..

Ballanced 50/50 fund system from Guidestone gained 6.44% over the last 10 years. LONG TERM BOND FUND 9.48%
QQQ from 2002 price of 24.15 to 68.29!!!
GUIDESTONE SMALL CAPS UP 8.27% FOR TEN YEARS
Dow Jones Total market went from 10,799.63 to 14,576.38!! and
oil is u[p some 100%...

What did you invest in.. What your broker cold called you on?? I

[Driftr]

It is time to feed the Bear some bonds. The bull has been at the trough long enough. If we could just get the Bernank to stop feeding it.

[bimetalaupt]

Aug 29, 2012 16:11:13 GMT -5 Driftr said:

It is time to feed the Bear some bonds. The bull has been at the trough long enough. If we could just get the Bernank to stop feeding it.

I am personally down from 54% bonds to 18.4126722%... Based on Par...Do not pan to sell them so I use par as value for my model called Expert 50/50.. Will interest go up???

I have heard for some four years interest rates are too low.. Hell on the saver!!! just look at M3..

Great Post...K4U
BiMetalAuPt

PS:EDIT.. I should add the USA saving rate last reported for June 2012 was 4.4%..Not good
PSS!!::::KASH IS KING!!

[Ombud]

As to REITs, I'm in TWO and love the dividend. Of course, I set a TS = yield [currently 13.90] so I cannot get slammed by a downturn. I actually set TSs on anything with a yield over 5% as those tend to be riskier. And spend around an hour per week per stock. Which won't preclude me from missing something on day 2 after review which is why those higher paying ones have TSs

[Aman A.K.A. Ahamburger]

Aug 29, 2012 16:23:24 GMT -5 bimetalaupt said:

Aug 29, 2012 16:11:13 GMT -5 Driftr said:

It is time to feed the Bear some bonds. The bull has been at the trough long enough. If we could just get the Bernank to stop feeding it.

I am personally down from 54% bonds to 18.4126722%... Based on Par...Do not pan to sell them so I use par as value for my model called Expert 50/50.. Will interest go up???

I have heard for some four years interest rates are too low.. Hell on the saver!!! just look at M3..

Great Post...K4U
BiMetalAuPt

PS:EDIT.. I should add the USA saving rate last reported for June 2012 was 4.4%..Not good
PSS!!::::KASH IS KING!!

Great point Bimetal, Kash IS King... Isn't that 4.4% up from 3.2% though? Going in the right direction. Next up Teir one at 10% and people will want more to hold USA debt? Isn't that also a way to get 10% Tier one.. Savers in the bank??.... K4U!