The Role of Leverage and Quality in Dividend Changes

Dividend increases are typically met with a positive reaction from investors, while dividend cuts are typically met with a negative reaction. Whether these changes signal positive or negative information, however, depends on the quality of the company and its leverage. Companies with low-to-moderate levels of leverage—defined as liabilities to total assets—can signal positive information by…

 

Investors Prefer Dividend-Paying Companies in Market Downturns

It may not be comforting, but individuals are rewarded over the long term for investing in stocks because stock prices can go up or down. Short-term market volatility and uncertainty creates a risk premium to entice investors to buy and hold stocks. It is important to note, however, that all stocks do not react equally…

 

Dividend Yield as a Valuation Measurement

Value investors are always seeking undervalued stocks to add to their portfolios while pruning those that are overvalued. However, a stock’s price doesn’t always reflect a company’s true value. The dividend yield is a useful measure of value for selecting undervalued securities and pruning overpriced stocks from your portfolio. A stock’s dividend yield is computed…

 

Screening With the Big, Safe Dividend Formula

Many investors seek income to supplement their portfolio returns while at the same time insulating themselves from market declines. In “The Little Book of Big Dividends: A Safe Formula for Guaranteed Returns” (John Wiley & Sons, 2010), Charles Carlson outlines a recipe for investment success: “Find stocks with above-average appreciation potential and safe and growing…

 

Market Wrap: Dividend Investing

Associate Financial Analyst at AAII Jaclyn McClellan spoke with Moe Ansari on Market Wrap about investing in dividend stocks and the approach used in the AAII Dividend Investing newsletter.     Market Wrap is a nationally syndicated broadcast. Moe begins each Market Wrap broadcast with an analysis of the day’s news from Wall Street and…

 

Lowell Miller’s Best Dividend Screen

A low-interest rate environment has helped to fuel a run-up in the prices of dividend-paying stocks. Equity-income investing is once again fashionable, but some investment advisers have always preached the long-term benefits of investing in dividend-paying stocks. Lowell Miller is known for his disciplined, dividend-focused investment strategies. He founded Miller/Howard Investments Inc. (www.mhinvest.com) in 1984…

 

Market Wrap: Dividend Investing

AAII Journal Editor Charles Rotblut spoke with Moe Ansari on Market Wrap about investing in dividend stocks and the approach used in the AAII Dividend Investing newsletter.     Market Wrap is a nationally syndicated broadcast. Moe begins each Market Wrap broadcast with an analysis of the day’s news from Wall Street and around the…

 

The Power of Compounded Growth and Reinvested Dividends

What’s the allure of dividend-paying stocks? Dividends provide a segment of return that is always positive. Increases in dividends provide an increased positive cash return and, consequently, increase the value of the instrument producing that return. Positive fluctuations are normal in the world of cash payments to shareholders; negative fluctuations are a rarity. Over time,…