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When looking for dividend stocks, Kelley Wright believes a company isn't necessarily more...

When looking for dividend stocks, Kelley Wright believes a company isn't necessarily more attractive just because it pays a higher dividend. The key is when a stock's current yield is at the high end of the range of past yields; a strong balance sheet and a consistent pattern of higher earnings and rising dividends help too. Wright's top 10: APD, ADM, KO, COP, CVX, OXY, PEP, RS, TXN, WAG.
Comments (19)
  • minwyhe
    , contributor
    Comments (103) | Send Message
     
    Who is Kelly Wright?
    13 Apr 2013, 11:27 AM Reply Like
  • Eddie Herring
    , contributor
    Comments (1924) | Send Message
     
    Author of the book "Dividends Still Don't Lie" and CIO at I.Q. Trends. He's also the editor of the Investment Quality Trends newsletter.
    13 Apr 2013, 12:05 PM Reply Like
  • JailDoc
    , contributor
    Comments (47) | Send Message
     
    3 generations of my family have owned PEP. It has been very good
    to us. My dividends are an important part of my retirement.
    13 Apr 2013, 12:03 PM Reply Like
  • Michael Bryant
    , contributor
    Comments (5373) | Send Message
     
    How about (APO)?
    13 Apr 2013, 02:03 PM Reply Like
  • Joe2922
    , contributor
    Comments (409) | Send Message
     
    What good will dividends help any investor in the next bear cycle or bear market? Stock market suffers major corrections every year, 2013 won't be any different. Buy at strong support after it holds, never chase. This is a good summary of where market is right now, a time to average out, since no one can nail the top perfectly. This straight up action can't last beyond June at the latest.
    Trade #1 complete, getting ready for Trade #2.
    Chart and discussion http://bit.ly/WpVqYk
    13 Apr 2013, 02:32 PM Reply Like
  • u01bsb0
    , contributor
    Comments (617) | Send Message
     
    think you actually answered your question...no one can nail the top or bottom perfectly. owning a dividend paying stock is preferable over a non dividend paying stock if both the stocks go down say 20%...
    13 Apr 2013, 02:35 PM Reply Like
  • Michael Bryant
    , contributor
    Comments (5373) | Send Message
     
    I wouldn't say the market saw a major correction each year. Sure, it saw a 10% pullback. I expect the same to occur.
    13 Apr 2013, 02:57 PM Reply Like
  • Joe2922
    , contributor
    Comments (409) | Send Message
     
    Dividend stocks fall too, in a correction, a bear cycle, a bear market. This market is extremely overbought and the uptrend has weakened a bunch. 5% yield in a 20% decline is not the math for me.
    13 Apr 2013, 03:09 PM Reply Like
  • Joe2922
    , contributor
    Comments (409) | Send Message
     
    that's your problem, mike, you can't imagine another bear market. When it dips 10% you'll buy more, then it will drop another 10%, you'll buy all the way down and make it a near-impossible task to get back to zero.
    13 Apr 2013, 03:11 PM Reply Like
  • wyostocks
    , contributor
    Comments (7647) | Send Message
     
    u01bsb0
    A twenty percent drop in price requires a long time of payouts to recoup. I think Joe has a good point.

     

    In fact if the market corrects twenty percent the high paying dividend stocks could see a bigger drop as they have run up the most in this latest run. For example, look at the five year chart of some good paying utilities and you'll see what I mean. $D has gone from about 28 to 60 in the last five years.
    13 Apr 2013, 04:04 PM Reply Like
  • Whitehawk
    , contributor
    Comments (3129) | Send Message
     
    "When it dips 10% you'll buy more, then it will drop another 10%, you'll buy all the way down and make it a near-impossible task to get back to zero."

     

    Another variant of the classic Martingale strategy. Many a gambler (and there are many out there) lost on this one. I think however many long-term equity holders that bought near market highs have been lucky and eventually dug themselves out - but it is unnecessarily painful and leaves that investor with much less capital to load up when prices are below the mean reversion shoot through.
    13 Apr 2013, 05:46 PM Reply Like
  • Michael Bryant
    , contributor
    Comments (5373) | Send Message
     
    If only it is easy to see the bottom. Did you pull all out in June of 2007 and get all in in March of 2007? And even if you bought at the top, it only took a little less than 6 years to get back to zero. If you bought more on the way down, you would have done well and have a nice profit by now.
    13 Apr 2013, 06:05 PM Reply Like
  • Whitehawk
    , contributor
    Comments (3129) | Send Message
     
    The smart investor knows when to sell his positions at a nice profit. Even Buffett sells. Note he sold Intel before it imploded to $20-22. I believe he made a profit ($60M or 25% gain).
    13 Apr 2013, 06:11 PM Reply Like
  • Michael Bryant
    , contributor
    Comments (5373) | Send Message
     
    Plus, after the crash, dividend stocks were the first to come back. So the key would have been not to sell. Yes, learn from your mistakes.
    13 Apr 2013, 06:12 PM Reply Like
  • Whitehawk
    , contributor
    Comments (3129) | Send Message
     
    Selling at the bottom at a loss is sheer idiocy unless you are forced to do so. It is surprising how many do so, yet are not forced to.
    13 Apr 2013, 06:17 PM Reply Like
  • Whitehawk
    , contributor
    Comments (3129) | Send Message
     
    I have the same view of bonds. After the next crash, I will load up. There's a cycle for everything and it is a fallacy that prices just keep rising.
    13 Apr 2013, 05:38 PM Reply Like
  • Michael Bryant
    , contributor
    Comments (5373) | Send Message
     
    I always scratch my head when people try to trade bonds. Isn't the purpose of bonds to hold to maturity and collect interest (coupon payments). Plus, if interest rates go up, bonds go down. It is projected that the Fed will start raising rates sometime between 2014 and 2018.
    13 Apr 2013, 06:10 PM Reply Like
  • Whitehawk
    , contributor
    Comments (3129) | Send Message
     
    "Isn't the purpose of bonds to hold to maturity and collect interest (coupon payments)." Not necessarily. Plus, even if held to maturity, there is an advantage to buying at a discount rather than overbought. People arbitrage the bond markets all the time and for good reason.
    13 Apr 2013, 06:15 PM Reply Like
  • Tom Guttenberger
    , contributor
    Comments (717) | Send Message
     
    This is such nonsense -- everyone knows the only thing that matters in dividend, or general investing, is how large a dividend is, and how impatiently a company passes through every last cent of earnings.
    13 Apr 2013, 10:11 PM Reply Like
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