Investing in stocks is not a common form of investment in the Philippines may be because there are many Filipinos who do not have enough knowledge and exposure about it. Actually, according to some study, only a tiny percentage of the Philippine population are investing in stocks or have stocks in their investments.
Basically, there are two common ways in how we can earn or make profit from stocks: price appreciation and dividends. In my previous article, I explain why stocks or companies holding that stocks are paying dividends. Just visit the link if you want to know why.
Dividends can be in the form of shares of stocks or cash. Most of the time, companies gave cash as a form of dividend it give to its shareholders. It will be directly credited to your stock account balance once all the clearing process is finished.
Each investor has its own strategy and goal in investing stocks. For example, most people are traders who buy and sell stocks most of the time who want to make a daily profit from each trade that they do. There are other investors who want a long-term investment who hold their shares for years. I am the type of investor who invests in stock market for a longer term.
It is the reason I want a stock which pays dividends consistently because in the long run, I know I have a sure income from its dividend. As much as possible, I look the history of the company before I buy the stock aside from other financial indicators and factors.
Examples of Dividend Stocks
One example of dividend stock I like in the Philippines is GMA Network Inc. (GMA7) which is consistent in giving dividends to its stock holders in the past three years. GMA7 is a multimedia company engages in making television and radio programs, movies, music recording and other related services.
Its main income comes from advertisement fees by other companies. I believe it is also a strong company with a good management that is why I want to invest in them. Its dividend yield in 2010 is 10%.
Another dividend stock I’m investing is First Philippine Holdings Corporation (FPH). It is a holding company engages in power generation, distribution, infrastructure, manufacturing, property and others. FPH owns shares of other companies like MERALCO, FGEN and EDC. It also owns Rockwell Land and First Philippine Industrial Park.
If you want to really make profit from stocks, you should invest in a long term for those which are giving consistent dividends and a strong company with a good management. Keep in mind also that you should pick a company that you know and understand its business.