Dividends are reported in major financial publications.
A wise man once said, income comes when you work for your money, but wealth comes when your money works for you. One way to make your money work for you is by investing in stocks that pay dividends. By developing a diversified portfolio of dividend-paying stocks you can create a steady stream of predictable income.
Goals and Temperament
Your financial goals and your investment temperament are unique, so the way you invest in dividend stocks needs to be unique. Start by determining your investment temperament. If you lay awake at night worrying whether your bank CDs are safe, you probably have a high aversion to risk. If owning Treasury securities is as exciting to you as watching paint dry, and you'd rather use that money to bet on the ponies, you probably have a high risk tolerance. Determine what your goals are for your dividend stocks. Knowing how you react to risk will help you reach your investment goals without going crazy.
Research
The more you know about the companies you want to invest in, the better prepared you will be to make an intelligent investment decision. Contact the company's investor relations department and request its most recent annual and quarterly report. Check out its stock price history, its earnings history and its dividend history. Look for consistent earnings and regular dividend payout over long periods of time. You want to know that the company has a history of paying regular dividends in both good and bad economic times.
Quarterly Dividends
Once you have decided on stocks that meet your criteria for your investment goals and temperament, check to see when the dividend is paid. Stocks pay dividends on a quarterly basis; for example, in January, April, July and October. To create a regular stream of dividend income you need stocks that pay dividends in each of the quarterly cycles. That way, one stock will pay dividends in January, another will pay in February, the third will pay in March, then the cycle begins again.
Buying Stocks
You buy dividend stocks the same way you purchase any other stock. You'll need an account with an investments brokerage firm, which can be a full-service firm, a discount broker or an online broker, depending on how much service you need. You'll probably have to deposit funds into your brokerage account prior to placing your buy order. You'll typically have the option of taking possession of your stock certificates or of having your broker hold your stock in street name. If you hold the stock certificates the company will send your dividend payments directly to you. If your broker holds your stock, the company will send the dividends to your broker on your behalf.
