Investing

What is a Dividend and are High Yield Dividend Stocks Actually Good?

what-is-a-dividend-and-are-high-yield-dividend-stocks-actually-good

What is a Dividend and are High Yield Dividend Stocks Actually Good? – How to Choose

Get our FREE dividend investing guide, complete with 3 stocks to get you started at https://www.Fool.com/PayMe

The word “dividend” gets thrown around a ton, but what does it actually mean, and why do companies pay dividends?

In this video, we break down the different ways companies decide to allocate capital, why companies pay dividends, and how dividend reinvesment plans (DRIP) work

We also dig into some core metrics investors need to watch with dividend stocks — dividend yield and payout ratio.

Dividend yield is the annual dividend payments divided by the price for one share of the company’s stock — it gives you a sense of the return you’ll earn even if the company’s share price stays flat.

Payout ratio is a measure of how able a company is to continue paying its dividend. It is calculated by dividing a company’s annual dividend payments by its net income.

Investors interested in good dividend stocks might want to start their search with the dividend aristocrats. These are stocks that have consistently raised their dividend every year for at least the past 25 years.

They have been able to do that because they have strong businesses that are able to shift with trends and weather economic downturns — and really those are some of the most important attributes of a good dividend payer.

————————————————————————
Subscribe to The Motley Fool’s YouTube Channel:
http://www.youtube.com/TheMotleyFool
Or, follow our Google+ page:
https://plus.google.com/+MotleyFool/posts

Inside The Motley Fool: Check out our Culture Blog!
http://culture.fool.com
Join our Facebook community:
https://www.facebook.com/themotleyfool
Follow The Motley Fool on Twitter:
https://twitter.com/themotleyfool

Thanks for watching the What is a Dividend and are High Yield Dividend Stocks Actually Good? video!

Watch the What is a Dividend and are High Yield Dividend Stocks Actually Good? video on Youtube

23 Comments
Share

23 Comments

  1. Tony Ontiveros
    July 21, 2021 at 12:34 pm

    So if you have stock, do you automatically qualify for a dividend? Do you have to own a certain amount of stock?

  2. Tabrez Siddiqui
    July 21, 2021 at 12:34 pm

    Content is awesome but…. why he is looking right corner again n again…

  3. walidovitch walid
    July 21, 2021 at 12:34 pm

    well put video, simple yet very informative

  4. Connor Ewing
    July 21, 2021 at 12:34 pm

    How do you receive a dividend, like if im invested in Coca Cola, how do I get it, liek does it just turn into shares or what?

  5. Fahad Javed
    July 21, 2021 at 12:34 pm

    this was awesome cant wait to see you grow

  6. - Classy Soba -
    July 21, 2021 at 12:34 pm

    Thank you for truly the most simplest description of dividends and its particulars.

  7. Cr Zero
    July 21, 2021 at 12:34 pm

    deserves more subscriptions

  8. Shiva GP
    July 21, 2021 at 12:34 pm

    What is the point of investing in dividends if u only get such a small percentage of it back? For example if a company had a 4% yield.. & 1 share costs $100, would it not take 25 years before start actually earning money? Not to mention that most likely, many of the companies who cut their yields, which would make it even longer. I'm still very new to this so just wondering.

  9. Captain Velli
    July 21, 2021 at 12:34 pm

    This was amazingly simple and informative, yes the internet has taken over traditional schooling and Youtube is the Yale of that.

  10. shitty mcr vids
    July 21, 2021 at 12:34 pm

    Dividend Aristocrats

  11. Buster Biloxi
    July 21, 2021 at 12:34 pm

    Richard: Ask an aristocrat!

  12. Buster Biloxi
    July 21, 2021 at 12:34 pm

    Try looking directly at the camera instead of furtively glancing to the side all the time. It’s so obvious!

  13. Devakumar Sr
    July 21, 2021 at 12:34 pm

    His eyes makes me dizzy….

  14. Delay In Block™ Productions
    July 21, 2021 at 12:34 pm

    Extremely helpful video. I just got into investing myself. This channel has been a great way to educate myself!

  15. Inside Diane's Life
    July 21, 2021 at 12:34 pm

    I have been trying to find this answer off and on for about a year.  I just can't get the answers I am looking for.  Why do they pay dividends though?  So what if their stock is more stable?  Do they get tax breaks?  Do they get better interest on loans?  Why wouldn't they put it back in to grow the company?  EX.  Amazon doesn't have dividends and they keep growing.  Why do some companies decide to do this and some do not?  What are all the benefits of paying a dividend?  If you have the answers please share.  Thanks

  16. W B
    July 21, 2021 at 12:34 pm

    Another great video

  17. PAT GARRETT
    July 21, 2021 at 12:34 pm

    What are the best paying Dividend Aristocrats??   Pat

  18. O So
    July 21, 2021 at 12:34 pm

    What do you guys think percentage wise you should put in the stock market vs savings and bonds??? So my question is this …. if I have an extra $1,000 a month how should I divide that in my investments??? Thank you

  19. Richard Person
    July 21, 2021 at 12:34 pm

    How do you find a list of "Dividend Aristocrats"?

  20. byron jeremiah
    July 21, 2021 at 12:34 pm

    Are Dividend companies suppose to provide DRIP or is it from the broker? I plan to be with SaxoBank for personal reasons, one of those me not living in the US and they don’t provide DRIP. They have told me to reinvest the dividends as I receive it, I’ve also asked about getting in shares instead of cash but still no reply from SaxoBank…

  21. Margarita Martinez
    July 21, 2021 at 12:34 pm

    Amazing!😇

  22. Caleb Gregory
    July 21, 2021 at 12:34 pm

    Great Video! As already stated, love that DRIP!

  23. Ni Tian
    July 21, 2021 at 12:34 pm

    Hooked on the DRIP. 💰👋🏽