Don’t Buy Stocks With the Highest Dividend Yield!Surprised? Don’t be. A high dividend yield can be a sign that a stock is a poor investment. It could also result a portfolio of poorly diversified stocks. Let’s take a look… More than 3,300 companies pay dividends. A quick screen of stocks that have a yield greater than 10% returns about 100 stocks. Of these:
The bottom line is you really don’t want to load your portfolio with THE HIGHEST of high yield stocks because they’re probably not the best. There is a better way to find stocks. Get Help From A Recognized ExpertDo you want to avoid the "high yield trap" and instead invest in the best yield stocks?There is one investment research service that I use all the time when looking for the best yield dividend stocks. That service is called Value Line They are regarded as one of the most respected investment research services and have been in business for over 80-years. They offer several different products but the three products I use are the Value Line Investment Survey, The Value Line Investment Survey – Small and Mid-Cap Edition, and the Value Line Investment Analyzer. Value Line is probably best known for its Timeliness Ranking System which ranks stocks based on their algorithm as a predictor for stock performance over the next six to twelve months. As a value dividend investor I do not rely on those rankings because I prefer to buy stocks based on discount to valuation. What I do like, however, is the breadth of stocks they track (about 1,700 in over 90 industries in the Investment Survey, plus 1,800 more in the Small & Mid-Cap edition). I cannot do without their Investment Analyzer because I can screen stocks using 300 parameters and up to 10-years of historical data. As an investor looking for yield, The Value Line Investment Survey provides exactly what you need. Each issue includes regular updates to four model portfolios including one called "Stocks for Income and Potential Price Appreciation" and one model portfolio called "Stocks with Above Average Dividend Yields." Each issue also includes sections that help you identify the best dividend stocks based on valuation ratios I talked about earlier. For example, these are some of the standard screens you get with each update:
That's six standard screens of deep value stocks. These are the screens that will reveal the best dividend stocks. I recommend you check out Value Line. It’s well worth the money if you are serious about your investment performance and finding the best dividend yield. They offer an inexpensive 13-week trial subscription so you can’t go wrong.
Are You Worried About Losing Money When The Stock Market Falls?
Buy this book to learn a simple, effective, and low cost process for dividend investors like you and me. The hedging strategy I developed and discuss in this eBook uses put options to provide protection if the stock market falls while allowing a portfolio to continue growing if the stock market continues to go up. Return to HOME Page from DIVIDEND YIELD |
