DIVIDEND STOCKS

Investing in dividend stocks is a powerful and safe method for building wealth. Then practice what you've learned with our free stock market simulation.

Best Dividend Stocks

Here are some superstar dividend stocks:

Symbol Company
JNJ Johnson & Johnson
WFC Wells Fargo & Co.
XOM Exxon Mobil Corporation
DUK Duke Energy Corp.
T AT&T Inc.
WELL Welltower Inc.
BX Blackstone Group LP
KMI Kinder Morgan Inc.
SOHO Sotherly Hotels Inc.

What Are Dividend Stocks?

What is a stock dividend?

A stock dividend is essentially a dividend payment made in the form of additional shares instead of the typical cash payout. If a company’s tight on liquid cash, it may decide to distribute dividend stocks to shareholders instead. They’re typically acknowledged in the form of fractions paid per existing share owned. Depending on the company, the payout frequency of their dividend will differ.

The shareholder can keep the shares and hope that the company will be able to use the money not paid out in a cash dividend to earn a better rate of return. Alternatively, the shareholder could sell some of the shares for cash. The biggest benefit of a stock dividend over a cash dividend is that shareholders don’t have to pay tax on it. If a stock dividend has a cash-dividend option, then tax does need to be paid (even if the shares are kept instead of the cash!)

How do stock dividends work?

A stock dividend is kind of similar to a stock split, in that a company will issue new shares to shareholders in proportion to their shares outstanding. A stock dilution of 25% or greater is considered a split. Stock splits simply reduce the par value per share of stock outstanding. In contrast, stock dividends require the shifting of retained earnings into the company’s capital stock account, which reduces the cash available to pay out classified as a dividend. Cash paid out that is greater than retained earnings is classified as a return of capital.

Stock dividends are typically in the 5% to 15% range. If a company pays a 10% stock dividend, it means that each shareholder will receive one new share for every ten shares they own. After the dividend is paid out, a shareholder with 100 shares will then own 110 shares.

Finding Dividend Stocks To Buy

Dividend stocks are appealing to both passive and active traders. A good dividend stock has a high yield but can also be bought at a good price. If you can’t get the stock at the price you want, wait. Or look for another opportunity. Stock prices are constantly fluctuating, so new opportunities arise every few weeks. Use a tool like FinViz to screen for stocks that meet your dividend criteria.



WALL STREET SURVIVOR'S BEST OF THE BEST LIST

*** April 23rd, 2020 ALERT—Motley Fool Picks Still Doing Well!****

The Motley Fool Stock Advisor’s stocks picks, even with this COVID crisis, have been performing very well as of late.  Here are some of their most recent picks and their performance:
  • Shopify (SHOP) – April 2, 2020 pick and it is already up 70.5%
  • Zoom Video (ZM) – March 19, 2020 pick and it is already up 21.2%
  • DexCom (DXCM) picked Feb 20, 2020 right before the market crashed and it is still up 7%
  • Tesla (TSLA) picked January 2, 2020 before the crash and it is up 75% compared to the SP500 -11% so it is ahead of the market by 86%
  • HubSpot (HUBS) picked December 5, 2019 and it is down 5%
  • Netflix (NFLX) picked November 21, 2019 and it is up 36%
  • Trade Desk (TTD) picked November 11, 2019 and up 19%
  • SolarEdge (SEDG) picked September 19, 2019 and it is up 10%
  • Zoom was also picked October 3, 2019 and it is up 95% since then.
Overall, their last 12 months of picks are still up 17% above the SP500 return.  Keep in mind, these FIVE very important tips regarding the Motley Fool Stock Picks. Tip #1 is that you need to buy them as soon as you get the alert because the stocks typically rise 2-5% in the first 24 hours of the pick being released. Tip #2 is that I buy about $2,000 of each pick and I immediately place a 20% stop loss order to control risk.  Two of their picks got stopped out in the last 12 months. Tip #3 is that their next stock pick should come out about May 7th, so make sure you have subscribe now so you are ready. Tip #4 is to always read your emails from the Fool because they do tell you when to sell stocks. Tip #5 is to use this link to their new subscriber page to save 50% (it will be just $99 a year).


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