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Dividends

$40 Coca-Cola Share Turns Into $9.8 Million Using the Power of Dividends

Last month Coca-Cola’s board announced a two for one stock split, the first in 16 years. A stock split basically doubles the number of shares you own. If you own 100 shares in a company, and the stock splits two for one, you end up with 200 shares. Companies generally split stocks when they think their share price has gotten too expensive or if the stock is trading too high compared to similar companies’ stock. A stock split is a good thing for shareholders if the stock price continues to rise a…

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Top 5 Things You Need to Know About Dividend Paying Stocks

Dividends are cash payments made to shareholders.  As a shareholder you are part owner of the company and therefore are entitled to share in the profits. Dividends can also help you determine when a share is undervalued, and priced right for purchase. There are a number of other additional benefits to owning dividend paying shares, and I discuss my top five in this article.

1. Dividends provide an immediate return

2. Your safety buffer against the worst case scenario

3. Dividends increase ove…

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Want To Increase Your Income With Dividends?

Are you looking to increase your investment income? What is the simplest and quickest way to increase your earnings? Dividends!

Not just any dividends but dividends that increase regularly. In this article let's take a look at the power of dividends and some recent dividend increases. A dividend is money that you receive for being a shareholder. Essentially the company is sharing it's profits with you the shareholder.

Let's take a look at a fictional company where the share price is $12 and th…

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Dividends make up 43% of S&P 500 historical returns

Preet Banerjee from WhereDoesAllMyMoneyGo.com recently posted a great article showing that dividends have made up 43% of S&P 500 historical returns. What does this mean for you?

More dividends (money) in your pocket, more passive income! Dividends are also a great safety net from poor management. It is difficult for investors like you and me to know when a CEO of CFO might be lying or if the statements have been altered.

However once a dividend has been paid it can not be taken back.  Here's a…

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What are dividends? Why should you care?

Dividends aren’t just something rich people talk about, or a Community Chest card in Monopoly.  They are the most consistent and easiest way to gain passive income as an investor.  When most people think about investing in the stock market they think about movies where young men with slick hair invest in little-known companies and then profit hugely when these companies suddenly explode. 

The phrase, “Buy low, sell high,” rolls off of most peoples’ tongues.  The fact is that this not how most p…

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Watch Out! A High Payout Ratio Could Get You in Trouble

Smart investors always check the payout ratio, it only takes 5 seconds and it could save you lots of money in the long run. The Payout Ratio is the ratio of money a company gives out to shareholders compared to how much money the company keeps for itself. This ratio is very important because it can be a good indicator of how much you as an investor can expect to receive in the future.

As a shareholder you are part owner of the company. As the owner you are entitled to share in the company’s pro…

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Paying Dividends Since the 19th Century

Can you list at least five companies that have been paying dividends since the 1800s? How about 10 companies which have been paying dividends for more than 115 years? In this post I list a few American and Canadian companies that have been paying dividends for a very long time.

But first, what is a dividend? A dividend is a cash payment paid to shareholders monthly, quarterly, or annually. The company decides when and how much to pay shareholders. As a shareholder you are part owner of the comp…

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My Best Investment Yet

275.97% return since I first purchased shares in TransCanada Corporation (TRP) in 2000. The return includes dividends, which I discussed in an earlier post. 275.97% return sounds like a really big number, but aside from the dividends I have not received a penny of profits yet. Why? Because I haven’t sold my shares in TRP yet, perhaps I never will. Why? Because my dividend yield based on the original purchase price is now 11.94% which is better than what I can earn in a savings account, term depo…

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Proof of Profitability

The following four paragraphs come from Kelly Wright and I could not have said it better myself:

"From our perspective and experience, the cash dividend is the more attractive profit path when investing in the stock market. In the first instance the cash dividend is just that, cash in hand; a tangible return on investment. Unless a company is committing outright fraud, a practice that will typically be short-lived, the cash dividend is evidence that the company is indeed generating profits; a c…

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Saying good-bye to two stocks in our portfolio

This week I say good-bye to two stocks in our portfolio. It’s been a great number of years, but it was time to part our ways. The split wasn’t accidental, in fact this week the Dow closed over 12,000 points for the first time in 2 ½ half years. When this happens I typically use the time to consider selling stocks which have in my opinion not performed well.

I sold Weis Markets (WMK) and Southern Company (SO) this week. I bought WMK back in 2003 when the company was undervalued and had an amazin…

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