Investing in stocks that pay dividends is one of the best strategies you can do when choosing which one to buy. If you are newbie in stocks, you may not understand how dividend works.
Dividend is one way of the company to share the profit made by the business. Some companies may re-invest those profits by expanding the business or buying more properties and equipment.
On the other hand, established and big companies like PLDT and Globe use their profit in paying dividend to their stock holders at the same time, they have more money for expansion. It is also a company policy in order to attract more investors.
Investors want a sure income or profit from their investments, right? One sure income-generating tool is dividend so investors are looking for stocks that give consistent and high-paying dividend.
Forms of Dividend
Dividend can be in the form of cash or shares of stock of the company itself. However, the normal form is cash that will be directly credited to your stock account. Normally, your stock broker will inform you through an email message about the payout. You can see an example on the image below.
In addition, you will also know when the payout will be because it is indicated in the information of the stock company. The company also informs PSE through a formal letter that they are giving dividend to their stock holder.
In the past, I have published several articles about dividend stocks. You could see below some of these posts. Read on to learn more about dividend.
Go read those posts to learn more about what is dividend and how it works. Actually, it is always better to buy stocks that give dividends because you will be sure that you can earn a profit even the market is down. You know most of these companies pay dividends in regular period and in increasing amount each passing year.
My First Dividend for 2013
Last march 12, 2013, Globe Telecom paid dividend to their stock holders. The amount is P33.50 per share of Globe stocks (GLO). The profit I got is not really big, around P301 for 1o shares of GLO.
Imagine this. You own 100 shares or 1,000 shares of Globe stocks. How much dividend can you get? Use your calculator. Roughly, you can earn P 3,350 for 100 shares and P 33,500 for 1,000 shares excluding tax.
How about 10,000 or 100,000 shares? Wow, that’s really a good money! Globe pays dividend twice a year, one in March and another one in September. The total dividend plays around P60- P65 per year.
You can see below the snapshot details of the Globe dividend payment that I have received last Monday from my online stockbroker, CitisecOnline (COL Financial Group).
Dividend is one way on how to earn from stock investing. It is better to focus on stocks that pay dividend and companies with strong financial foundation. If you are looking on which passive income to venture out, dividend stocks is one of the best choices to go.
Make sure that the company you’re investing is a strong company in terms of brand and management. In this way, you will minimize the risk of losing money since the company cannot close the business easily.