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Dividend Investing Tips

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Title: Dividend Investing Tips


1
Dividend Stocks Research
Dividend Investing Tips
2
Welcome to Dividend Stocks Research Your premier
site for Rankings and Reviews of the best
dividends stocks around. For more info on
dividend stocks please visit our website
DividendStocksResearch.com
3
  • Get Your Free Report On What You MUST Do to Never
    Run Out of MONEY in Retirement!
  • Well tell you about this
  • Special Offer
  • at the end of the video!

4
  • Hi, My name is Aaron and Im with Dividend Stocks
    Research, today were reviewing our recently
    published article

5
  • Dividend Investing Tips

6
  • He was wearing a Yankees cap, a crisp Brooks
    Brothers tie, and an Armani Collezioni
  • Core Gio Two-Button suit.

7
  • Just give it to me straight, he said in a voice
    shaped by serious net worth. What are the three
    things you look for in dividend stocks?

8
  • It was chance encounter at a busy restaurant in
    Terminal 1 at LAX where the tables were jammed
    together like seats in economy class. He
    overheard a phone call I was having with my
    editor.

9
  • Exactly how he figured out I wrote about dividend
    stocks remains a mystery. I guess he was a
    pretty good eavesdropper.

10
  • But finding the best dividend stocks doesnt have
    to be a mystery.
  •  Sure, we will always invest in a market where
    not much of anything is a given.

11
  • We cant predict the markets direction and we
    will always be tossed surprising developments.
    Economists didnt forecast the financial meltdown
    in 2008. Experts didnt tell us to strap in for
    the collapse in crude oil prices.

12
  • And more often than not, all you can depend on is
    your own common sense to make a safe investment.
    So let me tell you what I told the mysterious guy
    at LAX.

13
  • Let me give it to you straight and reveal the
    three things I look for in dividend stocks.

14
  • Dividend Stocks Essential 1 Good Management

15
  • Lets strip it all down to the bare bones basics.
    You only get paid a dividend when a company
    makes more money than it needs.

16
  • The company needs to pay its employees, its
    bills, pay down its debt, cover operating
    expenses, capital expenditures, and maybe set
    some cash aside for a rainy day.

17
  • It might also need to sock some money away to
    fund a future acquisition, or to expand. So there
    are plenty of places for the money to go before
    we can expect to be paid a dividend.

18
  • And obviously, theres got to be money coming in.
    Sales need to be higher than expenses. So,
    whats the best way to try and make sure all this
    happens?

19
  • Good management. Management that knows how to
    make money, spend money wisely, lead the
    business,and grow the profits. How do you know if
    a company is well managed?

20
  • Its not easy. Sins can be covered up. Artfully
    hidden balance sheet time bombs can be ticking
    away. Read the CEOs letter to shareholders in
    the annual report. Decide if what he says makes
    sense at a very basic level.

21
  • If the company has a challenge, is he addressing
    it head on and explaining his strategy for fixing
    it?

22
  • Do you like the direction he plans to lead the
    organization? Is he vague or specific? Does he
    accept responsibility for previous problems, or
    does he gloss them over?

23
  • Go to the financials. Look at how money is being
    spent. Is the management team running a tight
    ship? How much are expenses going up? Are they
    growing more quickly than revenues?

24
  • And when you look at the numbers, zero in on the
    profit margin. You want to see if the margin,
    the percentage of profit, is rising or falling.

25
  • When you see margins that arent growing, chances
    are you see management team thats not getting
    the job done.

26
  • And when profit margins arent growing, sooner or
    later, the dividend will be in trouble.

27
  • Dividend Stocks Essential 2 A Good Track Record

28
  • Dividend stocks with good management teams tend
    to come with a pretty good track record. These
    companies make it through rough times. They
    continue to pay the dividend no matter what.

29
  • They look ahead, and they adapt to changing
    business environments. For example, this year,
    weve seen the surge in strength of the U.S.
    dollar make it tough for companies that do a lot
    of business overseas.

30
  • Companies with a good track record arent
    strangers to this sort of disruption.
  •  A great way to find the best dividend stocks is
    to look at the Dividend Aristocrats.

31
  • These are big companies with terrific track
    records when it comes to paying dividends. Theses
    companies have paid a growing dividend for at
    least the past 25 years.

32
  • When the dividend is cut, the company is tossed
    off the list. Track records matter. So you wont
    find well-known companies like General Electric
    GE on the Aristocrats lineup, because GE cut its
    dividend a few years back.

33
  • But heres what you will find.
  • Little-known, but fairly large companies like
    Nucor NUE, Leggett Platt LEG, and Illinois
    Tool Works ITW.

34
  • When you look at companies like these, youll
    find the best dividend stocks for a rainy day.

35
  • Dividend Stocks Essential 3 A Simple Way To
    Keep Making Money

36
  • Will marketers who want to advertise on mobile
    devices still be spending a billion dollars a
    month with Google five years from now? Tough to
    say.

37
  • Will people still be using toothpaste and laundry
    detergent in five years?
  • Thats probably a safer bet, and its why Procter
    Gamble PG has been paying a growing dividend
    since 1957.

38
  • Take a look at how the stock has done over the
    past 20 years...

39
(No Transcript)
40
  • Im giving you this 20-year chart so you can get
    a feel for the long-term ups and downs. Do you
    see the hit Procter Gamble took in 2000? The
    stock lost half its value in just a few months.

41
  • But it kept paying the dividend. And it kept on
    selling toothpaste and laundry detergent.

42
  • If the Procter and Gamble stock takes another hit
    like it did fifteen years ago, we should feel
    fairly comfortable with its ability to rebound.
    The company knows how. Rough waters will not be
    uncharted waters.

43
  • Procter and Gamble competes in a simple business.
    You dont need brilliant engineers like the
    people working for Google.

44
  • But you do need the ability to understand your
    customer if youre going to be profitable in the
    consumer packaged goods business.

45
  • Understanding customers, and being in front of
    trends, isnt always easy. But companies like
    Procter Gamble know how. Thats why PG is one
    of Americas top dividend stocks.
  •  

46
  • A few other fairly simple businesses with solid
    dividend paying stocks...
  • Coca-Cola KO and PepsiCo PEP.
  • Coke has been paying a growing dividend since
    1963 and Pepsi since 1973.

47
  • Simple Companies Can Give You Dependable Dividend
    Stocks

48
  • And it can be simple for you to find the best
    dividend stocks when you look for the three
    things I look for. Good management, a good track
    record, and a straightforward business model.

49
  • Thats what I told the guy who cornered me in
    Terminal 1 at LAX. And by the way... That Armani
    Collezioni Core Gio Two-Button suit he was
    wearing... 1,995 off the rack at Saks Fifth
    Avenue.

50
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51
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52
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