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I hold my dividend payers in my Roth as well. While not everything is dividend payers, most are.

My favorites in my Roth are: ARR, TWO, KO, PEP, MRO, GE (I bought after the large drop in 08-09), NEE, JNJ, MET, WAB (not a dividend payer, but its tripled in 3 years), NGLS

Ok, I do have a few duds, but thankfully they are less than 10% of the portfolio.

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PBI is paying in the 12%+ range.

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supersnoop00 said:   PBI is paying in the 12%+ range.

Yield isn't everything. Look at their stock price. It is quickly approaching zero. They are paying out more in dividends than they are earning.

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I really like good dividend-stocks as well because they are grounded in some level of realistic valuation (it's much easier to value stocks that have consistent dividends than it is to value on growth).

LMT is one of my faves and has had a pullback recently so is a decent entry time.
PM has been great and is a hedge against weak dollar - but it's not in a pullback.
EXC has very high yield and has already gotten beaten up (after CEO said they may need to reduce dividend), and now is fairly stable price

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I have a position in MITT, NLY, and CIM - all REIT's and yields of around 12% or so. I keep MITT and NLY in a Roth - unfortunately I have my CIM shares in a taxable account. And yes, the dividends are treated differently due to the REIT classification.

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You might consider Motif Investing (no affiliation). They make it easy to buy baskets of lots of stocks all at once, which is mostly good for buying small amounts of custom diversified portfolio (for which there is no ETF). They have a suggested dividend basket, but you can make your own too.

http://sparkline.motifinvesting.com/offense-dividends/2216?utm_s...

Here's the FWF Thread on getting $150 for signing up.

http://www.fatwallet.com/forums/finance/1239734/

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cim is a dangerous play - there are filing irregularities and its dividend payout may be too high. I own CIM and am thinking of dumping before march 15th (last date for them to file 2011 reports else delisting!)

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xerty said:   You might consider Motif Investing (no affiliation). They make it easy to buy baskets of lots of stocks all at once, which is mostly good for buying small amounts of custom diversified portfolio (for which there is no ETF). They have a suggested dividend basket, but you can make your own too.

http://sparkline.motifinvesting.com/offense-dividends/2216?utm_s...

Here's the FWF Thread on getting $150 for signing up.

http://www.fatwallet.com/forums/finance/1239734/


No dividend reinvestment at Motif. Deal breaker for me.

Motif said: Will you reinvest my stock dividends?
If the stock in the motif you own pays a stock dividend, we will credit the additional stock shares to that motif. If the dividend is in cash, we will credit the money to your account and it will be reflected in your account balance. We do not offer dividend reinvestment at this time.

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Squeezer99 said:   ChefJoe said:   In the stocks thread I threw in AGNC . Take a look at their dividend.... 15% http://finance.yahoo.com/q?s=AGNC

I'm investing in ARR at 14% yield, but remember ARR and AGNC are non-qualified dividends. AGNC has a lot of fees (see: https://www-us.computershare.com/investor/3x/plans/buyshares.asp... and ARR has almost no fees for purchasing, re-investing, etc, only a $15 fee for selling and a $25 fee for bouncing a check, see their prospectus page 14 at http://www.armourreit.com/updates/11678_ARMOUR_Prospectus_03-30-...


You're getting hosed (like I was with my old INTC computershare drip plan... charged a transaction fee for each dividend reinvestment). Sharebuilder (and many others) will reinvest dividends for free and can execute buys/sells for $9.95 (or less) each way. I sold my old INTC drip and put the money into Sharebuilder to keep my full divi.

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Squeezer99 said:   supersnoop00 said:   PBI is paying in the 12%+ range.

Yield isn't everything. Look at their stock price. It is quickly approaching zero. They are paying out more in dividends than they are earning.


Payout ratio is currently 68%. It's a recovery play based on the IBM-like strategy they're building. Dividend will likely get cut by some percentage in the next few quarters but that may already be built into the current price.

Earnings:
https://eresearch.fidelity.com/eresearch/evaluate/fundamentals/e...

Dividends:
https://eresearch.fidelity.com/eresearch/evaluate/fundamentals/e...

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Squeezer99 said:   supersnoop00 said:   PBI is paying in the 12%+ range.
Yield isn't everything. Look at their stock price. It is quickly approaching zero. They are paying out more in dividends than they are earning.

No, they are still making more than they are paying.
Diluted earnings per share: $2.21
Annual Dividend:            $1.50
Cash: $950MM
Annual Revenue: $4.90B
Total Debt:     $4.02B

They do seem high on the debt, but they're still well above water.

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just read this guy's blog and let him do all the research for you www.dividendgrowthinvestor.com

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mrpresidentusa said:   
We don't just find them to buy them... we wait for pullbacks in price so that the dividend yields are higher than usual... or we find some trend in the business such that we expect improved earnings or cash flow to allow further increases in dividends later... or we use Ex-dividend dates as a tendency of the stock price to stay up or rise as we approach that ex-div date and use that phenomenon to our advantage such as selling naked puts that expire before that ex-div date... or sell naked puts OTM and be glad if it ends up ITM with stock put to us at that lower strike price... etc.


I do wait for pullbacks. Eg. - I won't buy PG now - almost trading at its 52-week high.

While the trend of stock increasing near the dividend date tends to work, it is not a shoo in since the street knows about it too. And I don't like to deal with short term options - commission and spreads make it somewhat non-interesting.

I tend to sell covered calls on stocks with dividends. Goal is around 10 to 12% with dividend + appreciation + call premium. Covered calls tend to somewhat balance the higher price of the stock - i.e. if the stock is rising, the money I will make with covered call will rise too - so I am not so picky about waiting for the stock to hit a super low price. If it meets my criteria of being a nice point away from the high and the 10/12% number, I will go for it. One thing that I have learned with call options on dividend paying stocks is that typically the street will exercise the call before the last dividend if the stock has gone up enough - so that needs to be factored in the expected gain calculation - i.e. less earnings from dividend but shorter investment period].

Have been doing well with a whole range of stocks with buy on pullback and covered call. CAT, DE, YUM, CCL, AXP, M, KSS, GIS, TM, BA, NOC, BMY, BHP.... BHP and YUM have been interesting. BHP took a hit after I bought it but covered call saved my bacon. Closed the call for very small premium and then sold another call later when the stock recovered. YUM really hit a home run but then the Chinese bad chicken caught up with it - but at no point, I lost any money on it and I think I am still on track to make the money that I anticipate making on it (unless bad chicken turns into bad chicken II). [Note to newbie's: Don't use my past list to make as indicative of good trades - they were good trades when I made them - but I probably would not buy any of them right now]. TM was interesting too - really took off. Sold the stock and bought a slightly deeper in the money option to create a spread. This way, got most of my 10% gain in a couple of months but I free up the capital for new investments. No more dividend to be had but letting the option premium time decay.

Most recent purchases: TWC, LMT, LTD, sold DRI Jan 2014 $45 put for $4.90. Bought COP/XOM without offsetting covered calls - hoping to sell calls later. Bought WMT without offsetting call when memo about sales was leaked a few days ago and it took a nice dip. WMT doesn't have a high dividend but expecting appreciation. Holding MCD without covered calls - again expecting appreciation as the bad chicken memory fades during the year.

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LNCO - Holds Linn Enegy (LINE) without the hassle of a K1.

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ARR, 14% REIT. No complaints so far.

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chedv said:   LNCO - Holds Linn Enegy (LINE) without the hassle of a K1.

second this one - buy on dips - good divi

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NoBoB said:   dawhim said:   NTG, very very stable. a fund that invests in MLP, basically pipelines companies. no K1 for you to deal with. the best thing? 100% of their dividends becomes return of capital in the past few years. yield isn't the greatest, but you can't beat tax free.

Distributions classified as return of capital are not tax-free, they're tax-deferred. ROC lowers your basis in the stock, so when you sell, that distribution is taxed at the cap gains rate for your holding period. Still good to get the cap gain rate instead of ordinary income, but it's not free.

Disclosure: overweight in KYN, another MLP fund.


you are right, I forgot about this. but let's get into a bit of cost basis tax reporting. The question to ask is will your broker gonna reduce your tax lot because you get ROC payments? I highly doubt it. at the end when you sell the stock, the cost basis your broker reports to IRS is gonna be the same cost basis you acquired the stock. are you gonna not go by what's on the 1099-b provided by your brokerage?

you don't get 100% ROC pmt with KYN, 50-75% goes into qualified div in the past.

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prastogi said:   chedv said:   LNCO - Holds Linn Enegy (LINE) without the hassle of a K1.

second this one - buy on dips - good divi


Does anyone have a formula for weighing yield vs dividend growth rate? For example, KMP yields 5.98% while LINE yields 7.7%. However, KMP div grows at a rate of 6.99% over the last 5 years while LINE grows at 2.85%. Which do you choose?

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Do you guys reinvest your dividends? agnc and arr obviously attractive but higher risk, perhaps a balace of those along with a few more stable ones. The wife and i have around 20k in savings earning something like .55% and around 45k in rewards checking but they keep lowering the rate, its 2% up to 15k, but only .15% after that. Really want to take at least a little of this and do something more productive with it.

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supersnoop00 said:   PBI is paying in the 12%+ range.
I bought PBI a couple months back at around $11.30 per share, I was very intrigued by it with the high dividend yield and felt that the share price could not get any lower than that. So far it has done pretty good since I bought it.

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walletfart said:   I really like good dividend-stocks as well because they are grounded in some level of realistic valuation (it's much easier to value stocks that have consistent dividends than it is to value on growth).

LMT is one of my faves and has had a pullback recently so is a decent entry time.
PM has been great and is a hedge against weak dollar - but it's not in a pullback.
EXC has very high yield and has already gotten beaten up (after CEO said they may need to reduce dividend), and now is fairly stable price


I've owned all of these. I still like and own LMT & PM, but got rid of EXC. IMO, if they say they "might cut the dividend", that means they will.

VOD, MCD, & SDRL are at decent prices also.

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I have been having the thought - super original I know - of buying high dividend paying stocks instead of regular savings paying next to nothing these days. The index fund is especially appealing to me. Any suggestions for ones available through USAA?

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citifan said:   I have been having the thought - super original I know - of buying high dividend paying stocks instead of regular savings paying next to nothing these days. The index fund is especially appealing to me. Any suggestions for ones available through USAA?


While I love high dividend payers and dividend growers, I caution anyone against pouring their savings into dividends stocks in search of higher yield. The level of risk associated with even the highest steadiest blue chip dividend payers is off the charts compared to a savings account. Don't pull money from a savings account and put it in the stock market (near record highs for that matter) without understanding the risk that you're taking.

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depreshun said:   valueinvestor said:   There could be some distortion caused by the increase in taxes on dividends. Filthy rich people are going to be a bit more averse to receiving dividends this year in their taxable accounts (now taxed at 20%), which may make dividends good for tax-advantaged accounts or taxable account of people below the top bracket.



I keep all of my Dividend yielding stocks in a Roth IRA. But I am not filthy rich anyways lol...


For some, dividend stocks in an traditional ira does not make sense at this time since the dividends will be taxed as ordinary income when withdrawn. In a Roth IRA it will depend on your tax bracket in the future.

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depreshun said:   valueinvestor said:   There could be some distortion caused by the increase in taxes on dividends. Filthy rich people are going to be a bit more averse to receiving dividends this year in their taxable accounts (now taxed at 20%), which may make dividends good for tax-advantaged accounts or taxable account of people below the top bracket.



I keep all of my Dividend yielding stocks in a Roth IRA. But I am not filthy rich anyways lol...


For some, dividend stocks in an traditional ira does not make sense at this time since the dividends will be taxed as ordinary income when withdrawn. In a Roth IRA it will depend on your tax bracket in the future.

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Here's a list of interesting stocks:

Mortgage Reits

AGNC 15.4%
ARR 14.5%*
MTGE 13.7%
TWO 12.7%

Equity Reits

OHI 6.5%
ARCP 6.4%*
MPW 5.6%
HTA 5.1%
O 4.9%*
STAG 5.2%

Stock Stocks

TGH 4.3%
INTC 4.3%

*Monthly dividend

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rpi1967 said:   depreshun said:   valueinvestor said:   There could be some distortion caused by the increase in taxes on dividends. Filthy rich people are going to be a bit more averse to receiving dividends this year in their taxable accounts (now taxed at 20%), which may make dividends good for tax-advantaged accounts or taxable account of people below the top bracket.



I keep all of my Dividend yielding stocks in a Roth IRA. But I am not filthy rich anyways lol...


For some, dividend stocks in an traditional ira does not make sense at this time since the dividends will be taxed as ordinary income when withdrawn. In a Roth IRA it will depend on your tax bracket in the future.




It is my understanding that any Roth IRA gains be it by interest, dividends, etc. are not taxable providing the gains have been kept in the Roth IRA for 5+ years and you withdraw acording the the age rules, etc.

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Here is a link to a pretty good article...

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Have CYS, AGNC, ARR and SAN (Banco Santander, S.A., 8.24% biggest Spanish bank).

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Why is there interest in the explicit yield rather than the earnings yield of the underlying business? BRK.A for example grows book value 10-12% per year, but pays no dividend. Assuming long-term gains, the taxation would be the same if you just sold a few shares each year rather than receiving a dividend.

Or are you guys trying to look for low-vol dividend stocks as a replacement for fixed-income?

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Stone Harbor Emerging Markets Income Fund (EDF) - NYSE is a fund I've bought into off and on. Monthly dividend is $0.18 per share for about a 9% return.

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My list -
MO
FE
ATT
LLY
GIS
INTC
WAG

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error

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error

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PrincipalMember said:   mrpresidentusa said:   
We don't just find them to buy them... we wait for pullbacks in price so that the dividend yields are higher than usual... or we find some trend in the business such that we expect improved earnings or cash flow to allow further increases in dividends later... or we use Ex-dividend dates as a tendency of the stock price to stay up or rise as we approach that ex-div date and use that phenomenon to our advantage such as selling naked puts that expire before that ex-div date... or sell naked puts OTM and be glad if it ends up ITM with stock put to us at that lower strike price... etc.


I do wait for pullbacks. Eg. - I won't buy PG now - almost trading at its 52-week high.

While the trend of stock increasing near the dividend date tends to work, it is not a shoo in since the street knows about it too. And I don't like to deal with short term options - commission and spreads make it somewhat non-interesting.

I tend to sell covered calls on stocks with dividends. Goal is around 10 to 12% with dividend + appreciation + call premium. Covered calls tend to somewhat balance the higher price of the stock - i.e. if the stock is rising, the money I will make with covered call will rise too - so I am not so picky about waiting for the stock to hit a super low price. If it meets my criteria of being a nice point away from the high and the 10/12% number, I will go for it. One thing that I have learned with call options on dividend paying stocks is that typically the street will exercise the call before the last dividend if the stock has gone up enough - so that needs to be factored in the expected gain calculation - i.e. less earnings from dividend but shorter investment period].

Thanks for the plan on covered calls... I'm going to give it a try...

Have been doing well with a whole range of stocks with buy on pullback and covered call. CAT, DE, YUM, CCL, AXP, M, KSS, GIS, TM, BA, NOC, BMY, BHP.... BHP and YUM have been interesting. BHP took a hit after I bought it but covered call saved my bacon. Closed the call for very small premium and then sold another call later when the stock recovered. YUM really hit a home run but then the Chinese bad chicken caught up with it - but at no point, I lost any money on it and I think I am still on track to make the money that I anticipate making on it (unless bad chicken turns into bad chicken II). [Note to newbie's: Don't use my past list to make as indicative of good trades - they were good trades when I made them - but I probably would not buy any of them right now]. TM was interesting too - really took off. Sold the stock and bought a slightly deeper in the money option to create a spread. This way, got most of my 10% gain in a couple of months but I free up the capital for new investments. No more dividend to be had but letting the option premium time decay.

Most recent purchases: TWC, LMT, LTD, sold DRI Jan 2014 $45 put for $4.90. Bought COP/XOM without offsetting covered calls - hoping to sell calls later. Bought WMT without offsetting call when memo about sales was leaked a few days ago and it took a nice dip. WMT doesn't have a high dividend but expecting appreciation. Holding MCD without covered calls - again expecting appreciation as the bad chicken memory fades during the year.


Thanks for covered call plan!

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prastogi said:   chedv said:   LNCO - Holds Linn Enegy (LINE) without the hassle of a K1.

second this one - buy on dips - good divi


LINE and LNCO dropped quickly last week, but then announced a buyout which replenished their source for their high dividend! The stock shot right back up!

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what is the consensus on BDC's (business development companies) like PSEC, KFN?
PSEC consistently has been paying in 11% range....

I believe the dividend is taxed as ordinary income

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Why would I want dividend paying stocks? I have to pay *taxes* on dem nasty things!

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agreed, but arent they possibly best suited for IRA/401(k)?

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