About High Dividend Stocks
High dividend stocks offer the most consistent return on investment. Investors either look for quick returns or invest in stable high dividend stocks.
Price to earnings ratio or PE is used to determine stock growth. A stock with a high PE and smaller earnings has more growth potential. Investors want more than 10% return from these types of stocks.
Do determine the PE of a stock. All you have to do is take the share price and divide it by the earnings of every share. This result will be the PE.
The stock market is very unpredictable but many investors say that the PE should stay with the stocks growth. For example if a stock traded at $10.00 and then reaches $12.50 then the growth is 25%. The PE should also be 25% then.
If the PE ratio of the stocks comes down then the prices of the stocks will also decrease. This is why many investors buy stocks with reasonable PE, which provides with good dividends. They plan on profiting from the inflow of dividend payments rather than making profit on a leap in the core stock prices. If you do not want to risk it with high PE stocks, then go for this approach instead.
If the yield for a dividend is more than 5% you can have a good ROI (return on investment) simply because there is no inflow and even if the stock does not change in price you still yield the dividend percent.
Yield can be calculated by dividing dividend amount per annum by the current stock price. Some stocks have very high yields, in some cases more than 10%. Past experiences and future predictions talk of a dividend cut in the future. This is why high yielding dividend stocks may not be your safest bet. The dividends cuts will decrease yield and will bring a dramatic change in your calculations. - 23212
Price to earnings ratio or PE is used to determine stock growth. A stock with a high PE and smaller earnings has more growth potential. Investors want more than 10% return from these types of stocks.
Do determine the PE of a stock. All you have to do is take the share price and divide it by the earnings of every share. This result will be the PE.
The stock market is very unpredictable but many investors say that the PE should stay with the stocks growth. For example if a stock traded at $10.00 and then reaches $12.50 then the growth is 25%. The PE should also be 25% then.
If the PE ratio of the stocks comes down then the prices of the stocks will also decrease. This is why many investors buy stocks with reasonable PE, which provides with good dividends. They plan on profiting from the inflow of dividend payments rather than making profit on a leap in the core stock prices. If you do not want to risk it with high PE stocks, then go for this approach instead.
If the yield for a dividend is more than 5% you can have a good ROI (return on investment) simply because there is no inflow and even if the stock does not change in price you still yield the dividend percent.
Yield can be calculated by dividing dividend amount per annum by the current stock price. Some stocks have very high yields, in some cases more than 10%. Past experiences and future predictions talk of a dividend cut in the future. This is why high yielding dividend stocks may not be your safest bet. The dividends cuts will decrease yield and will bring a dramatic change in your calculations. - 23212
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