Finding Value In Dividend Stocks

Who has not been attracted to discounts? “25% off!”, or “Buy 2 get 1 free!”, or even “$100 cash mail-in rebate!” Savings and rebates certainly make purchases much more enticing. But when it comes to buying stocks, far too many people walk right past offers of savings and rebates without so much as a glance. Let’s take a glance at them now… dividends—the stock market’s discounts.

Although it is tempting to scour the many lists of dividend paying stocks and superficially pick the ones that offer the highest yield (dividend payment relative to stock price), doing so can sometimes turn into a futile exercise of paddling upstream. What good is it collecting 10% per year in dividends when the stock price loses 25% over the same period? Despite all the paddling in the right direction, you still move backwards. Some stocks have such high yields only because their stock prices recently took big hits

Source: Wealth Daily

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