Keep up with the latest news on high dividend stocks and learn all you need to know about the best stocks for dividends. Our list of best dividend stocks is carefully vetted and rated by industry-leading experts to make it easier for you to weed out the chaff and find the best dividend paying stocks for your investment portfolio.
What Are Dividend Paying Stocks?
If a company pays out part of its earnings to investors on any kind of regular basis, it is a dividend stock. Dividends are paid out on a per-share basis. If you own 1,000 shares of stock in Company X, for example, and they decide to pay out a dividend of 25 cents per share, you’ll receive a check for 1,000 times $.25, or $250.
Why Invest in Dividend Stock?
In these days of fast fortunes, dividend paying stocks are often overlooked by mainstream investors and day traders. Over the years, you can build up an impressive portfolio of dividend stock offerings and reap a healthy return on your investment. Income from dividend stock is taxed at a preferential rate – that is, the tax on dividends is less than the tax on other kinds of income. Owning dividend shares – and reinvesting your dividends in more shares – can help you build a retirement nest egg that will pay you out a comfortable dividend income when you retire.
Types of Dividends
Companies offer several different types of earnings on dividend stock. They include regular cash dividends, paid out on a regular schedule, one-time cash dividends and stock dividends, sometimes called a stock split.
Regular cash dividends are generally paid out quarterly (four times a year), but some companies may pay out on dividend stock twice a year, once a year, monthly or, very rarely, on no set schedule at all.
One time cash stock dividend payments may be made when a company has some sort of special event: a particularly high earning year, for example, or a large lawsuit win. They may be made in additional shares of stock, a cash dividend payment or a combination of the two.
Stock dividend payments, or stock splits, may be paid in lieu of or in addition to a cash dividend. A company may decide to issue a stock dividend because they are low on cash to make payments, or to reduce the price per share of stock and encourage more trading.
Learn more about dividend stock and get recommendations on the best paying dividend stocks from our experts right here.