Written by Hank Coleman I am loyal to a fault. I will stick with a company that I grew up with and love all the way to the bitter end. While being loyal may be a great trait, it often gets me into trouble as an investor. The Dividend Ninja’s recent recap of his Dividend Growth Index and individual stock picks reminded me of a recent friendly debate that we had. The Ninja is a big fan of PepsiCo Inc, but I personally love and own shares in Dr. Pepper Snapple Group. Like the wise Ninja predicted, that hasn’t worked out well for me over the past six months when compared to his choice. I mentioned my love for Dr. Pepper and its vast stable of beverages months ago when the Dividend Ninja first mentioned buying shares of PepsiCo Inc. He was quick to point out that PepsiCo has several things going for it that Dr. Pepper unfortunately does not. Pepsi is much more than simply a beverage company thanks to its ownership of Frito-Lay snack food strategic business unit, Quaker Oats, and other divisions ...

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Written by Hank Coleman There is a lot of talk about great dividend stocks to purchase for the long-term. But, how do you weed out the great dividend paying stocks from the hundreds of good or mediocre ones? There are a few key metrics that dividend investors need to consider before purchasing their first share. Here are a few of the biggest metrics to consider. Dividend Yield Dividend yield is simply the annual amount of dividends per year per share dividend by the price per share of the company’s stock. For example, Apple recently announced that it was issuing a quarterly dividend of $2.65 per share or $10.60 per share annually. With Apple’s share price currently hovering around $600 per share, its dividend yield is 1.76%. A company’s dividend yield provides investors with a way to visually see how much of their investment is being returned to them each year in the form of dividends issued by the company. Dividend Growth Rate Another key dividend metric that investors should consider ...

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written by Hank Coleman Mutual fund managers are getting confused. It seems like more fund managers are deviating from their fund’s stated focus and suffering from style drift in order to own one of the hottest stocks of the past decade. More than 40 dividend funds have recently bought shares of Apple even though the company does not yet issue a dividend. Even mutual funds that focus on small companies have gotten into the act. Over 50 small capitalization and mid-cap mutual funds have bought shares of Apple stock even though the company’s ballooning share price has made it the largest company in the world. Is this new development a good trend? Or, is it something to worry about? Signs Of Things To Come? Many people have predicted that Apple will begin to offer a dividend to its shareholders this year. Do these dividend funds know something that the rest of the public does not? Or, are they simply anticipating the inevitable? Apple has almost $100 billion of cash on its balance sheet ...

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written by Hank Coleman My father-in-law was a bank executive for over thirty years at a large regional bank in the United States, and he amassed quite a bit of his company’s stock through options over his career. Now, in addition to his pension, he also has quarterly dividends that support him in retirement. That is the beauty of dividends. They are truly a passive income investment in most cases, and they can often help you to get more out of your finite investment resources than other options allowing you to more efficiently save for retirement. How Much Do You Need? I used to watch the share price of my father-in-law’s bank like a hawk. It gave me something great to talk to him about when the conversation lagged around the dinner table. I was amazed after a particularly brutal quarter of share price decline when he told me that he did not care because he was not interested in selling his shares. He only wanted the dividend and the security that the payments brought him in retirement. ...

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The following post is written by Hank Coleman at MoneyQ&A. A dividend can actually be a huge red flag depending on where the company gets the money for it. If you know what to look for, a company paying or increasing its dividend is not always a good sign. How does your favorite dividend paying company get the money for those annual or quarterly payments? Have you seen the statement of cash flows and income statement? Do you bother to dig deep to learn as much as you can about the companies that you are investing in? You definitely should take the time to understand where the money is coming from. You need to know the balance sheet, statement of cash flows, and income statement inside and out of companies you potentially want to invest in. Anything less than thorough due diligence can leave you vulnerable. Here are two examples of companies issuing or increasing their dividend when they possibly should have considered other options. Rising Dividends And Sinking Revenue Investors love ...

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