New answers tagged dividends
1
Most investment funds fees charge according to Net asset values(NAV). I.e., your investment will rise or fall over time, the charges are based on closing asset value.
According to this UK vanguard fees page, the account fees are capped to £375 and free if the NAV is above £250,000. For the complete charges information, you should read this costs table. ...
1
Im assuming you’re in the UK? I’m not sure what the .15% account fee is you’re referring to but assume it’s something your brokerage firm charges?
The ETF itself has an expense ratio of .07%, which is deducted from the etf itself vs deducted from your account.
An ETF has no say regarding what fees are charged to buy or sell its shares. If there is a ...
3
The macroeconomic reason is simpler than what most people realize.
Stocks in general have to pay dividend because if no stock paid dividend, what would the companies do with the money? The economy is growing perhaps by 2.5% in real terms or 4.5% in nominal terms. So, in general, you can expect a typical stock to yield 4.5% plus the
average dividend yield. ...
3
You are correct, receiving a dividend provides zero total return and if received in a non sheltered account, you are paying taxes for the privilege of receiving some cash flow. In addition, you're paying taxes on the full amount of the dividend whereas if you sold an equal dollar amount of a non dividend paying stock for that same cash flow, you'd pay ...
6
why would you ever want a dividend?
The main reason is if you want to get periodic cash from your equity position without having to sell any of it. You pay transaction costs when you sell (either direct or indirect through having to sell at the bid price), and it used to be harder to sell single shares, or even and number of shares that was not a multiple ...
0
While dividends are cash flow rather than income, it's somewhat different with preferred stocks since they are a hybrid security, leaning more toward fixed income.
The bulk of them are issued at $25 and are callable in 5 years at the discretion of the issuer with a maturity date which can be decades or even never (perpetual).
There are three primary risks.
...
3
One practical solution is to invest in an ETF like DGRO. Currently it is yielding 2.29%, so to live off of divdends, you have:
(1500*12) / .0229 = 786,000.
At $500/month, you have some work to do.
2
That depends, what will you be investing in for dividends? Will it be a mutual fund/index fund/ETF that will produce a 0.5%-3% dividend? Possibly a bond fund that will give ~2% in dividends? Will it be energy/oil stocks that can give anywhere from 2%-7%? How about REITS that can give anywhere from 2%-8%? That all depends on you, but I will set up the ...
1
A companies core buisiness won't keep growing forever, at least not at a pace that is compatible with stock market expectations and will soak up all the money a successful buisiness makes.
So what does a successful company do when they inevitablly run out of room for natural growth. They have a few options.
Just hoard the money in cash or liquid ...
2
The question seems to assume that bonds and stocks are nearly perfect substitutes for each other. They are not. They are exposed to different risks (market risk vs. interest rate risk, primarily) and have expected rates of return that correspond to the market's pricing of that risk.
There are gains from diversifying across stocks and bonds, so I would say ...
7
I don't think rich people will prefer shares(stocks) with dividend or even bonds. Because in both these cases they will need to pay taxes.
I think rich people will prefer non dividend paying , high growth stocks with high beta.
For middle class should look at asset allocation
0
Simple.
Difference between shares and bonds:
By owning bonds, you just hold some generic instrument that is supposed to yield a particular amount but you never know that in case of junk bonds. Quality bonds yield little, so the only way to make real money with bonds is by purchasing junk bonds (I won't recommend that, though)
By owning shares, you own part ...
1
Generally, all securities on the market can be analyzed for their dividends vs growth potential, and this is called Value on the high-dividend end, and Growth on the low-to-no dividend end; of course this is a continuous scale.
Some investors prefer Growth investment, others prefer Value investments. It depends a lot on their personal situation, and their ...
2
When talking about “ordinary” shares it is not helpful to use the word “fixed” because really there is no such thing (preference shares are another discussion). In relation to ordinary shares, every board of directors has a unique dividend policy that they can change at any time.
On Sept. 18 2019 the Microsoft board of directors declared a quarterly ...
0
Check out Aaron's (AAN), Apple (AAPL), AbbVie (ABBV), AmerisourceBergen (ABC), Abbott Labs (ABT), Accenture (ACN), Agilent (A), Analog Devices (ADI), Automatic Data Processing (ADP), etc.
Most seem to declare dividends which change from time to time but do change, I would suspect based upon earnings, the general economy and other companys' dividend ...
8
Most companies try to maintain a steady dividend payout, increasing them as profits rise. That's because these companies and are often courting investors who want consistent dividend payments.
Other companies have floating rate dividends where the size of the dividend depends on company earnings. This is more prevalent where earnings are seasonal.
It ...
19
They DO pay one indexed to their performance.
The dividend is a board decision that is revisited for every dividend paid. You just see the result, and as it is not changed, assume that it is automatic.
Microsoft could say
No. The BOARD could say, but they just do not. Not standard. Plus, what for?
27
Share value
Paying dividend is a way to be more attractive to more shareholders. The more fixed it is, the easier it is for a shareholder looking for cash returns to invest. You will attract juicy and passive fund holders, equities and pensioneers which are dream investors because as long as they get their value they don't mix into the business even if they ...
3
I'm going to try and provide a short/sweet answer compared to the other two provided.
When companies cut their dividend, it typically means they are hurting financially which is a red flag for investors. So investors may act on those fears and pull out their money causing the stock to drop a substantial amount. This isn't good for the company because it ...
0
I think at the core of this question is a misunderstanding of debt. There's debt, and then there's debt. And that's not to say there is good debt and bad debt, as some people refer to mortgages as "good debt" and credit cards as "bad debt" but just that not all debts are the same. For example, not all mortgages are good so not all mortgages can be good ...
1
Chances are everyone who reads this StackExchange knows that debt is dangerous and should be avoided.
While I do agree that debt is dangerous and should be avoided, not everyone does. Heck there are people on here that advocate taking pay day loans!
Even the most debt adverse financial commentators suggest that a mortgage is an acceptable risk. They ...
2
Scrip dividends are liable to income tax in the same way that cash dividends are. After the tax free dividend allowance of £2,000 (fr 2018-19 onward) had been used then you pay tax at the appropriate self assessment rate.
If the value of the scrip dividend shares varies by more that 15% from the value of those share on the scrip dividend payment date, the ...
Top 50 recent answers are included
