Reasons of Investing in Dividend Paying Stocks
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Only stable companies consistently pay out dividends
- Cash Flow in both up and down markets
- Compound your money more quickly
- Cash in your pocket without selling
- Hedge against inflation
A company’s dividend payment comes from its operational success and not from the panic, hype, or analyst interpretations that influence its stock price. Throughout these rocky market periods, dividend payments allow us to make money even when the stock price moves lower.
Why are growing dividends important?
Dividends also have the added bonus of being exceptionally difficult for companies to fake. After all, it’s difficult to convince lenders to loan money to a company if that company is going to turn around and hand it over to its shareholders. As a result, to sustainably make and increase those dividends, the business needs to generate serious cash on both a regular and repeatable basis.
Get a list of Dividend Paying Stocks from Australia, China, Hong Kong, India, Indonesia, Korea, Malaysia, New Zealand, Philippines, Singapore, Taiwan and Thailand now.
Need not look too far. The REITs listed in SGX pays very good dividends. (6 – 9+% p.a. and makes quarterly payment).
Only discipline is that one has to reinvest the dividends to get the compounding effect.
I agree to this statement.
“Only discipline is that one has to reinvest the dividends to get the compounding effect.”
I think most people don’t do it. I did not practise this re-investment of the dividend either.
When a corporation earns a or surplus that money can be put to two uses it can either be re-invested in the business called or it can be paid to the shareholders as a dividend. Many corporations retain a portion of their earnings and pay the remainder as a dividend..For a a dividend is allocated as a fixed amount per share. Therefore a shareholder receives a dividend in proportion to their shareholding.