Why Figure Out The Highest Dividend Paying Stocks?

Knowing the highest dividend paying stocks among the set of publicly listed companies can bring you a lot of advantages. First of all, earning dividends is the way how those who buy stocks are supposed to earn money, not by buying them at lower price and then gaining some profit by selling these stocks at a higher price. Now, I don’t mean to say that nobody should attempt earning profits in stocks through this buy-and-sell method; it’s already there and there’s barely anything that anyone can do about. Besides, the whole thing is legal after all. Buy you have to know this: The greatest stock investor and the first man who became a billionaire through stocks never did that. His name is Warren Buffett and he made his fortune by investing in companies and keeping those investments for dividends, and not for a future selling.

 

How Do You Know If That Stock Is One Of The Highest Dividend Paying Stocks?

Highest Dividend Paying StocksThere are two ways to do this and both of them are very simple. One is by looking at the list of dividend released by the Stock Exchange. There, all the companies listed under it will be named and the amount of dividends that they pay will be disclosed. Usually, these dividends are given in total. Finding out the highest dividend paying stocks has to be done on a “per share” basis and not on a “net/total basis”. This means that if you want to know how much you earn if you only own a certain number of stocks, you will have to divide this total number of stocks that are “issued and outstanding”, it cannot be just one or the other – the number of stocks that you are to use as the divisor has to be both “issued” and “outstanding”, else, it would to a wrong result.

 

The Second Method

The second method of finding out the highest dividend paying stocks is much more tedious than the previous one. It is because in this method, you will really have to examine the financial statement of each company that you are prospecting. The reason for this is because of having access to better disclosure. Some companies don’t really pay their stockholders’ dividends in cash; some are just paying them with simply more stocks from their company or from another company to which they are also an owner. While this isn’t necessarily a bad thing, you might want to know about this so as to be sure that if you want cash, you get cash. Then you do the same thing: Divide the total dividends paid by the number of stocks that are issued and outstanding.

 

Extrapolating The Tendencies

Highest Dividend Paying StocksYou have to do this examination on companies not just in one or two, but three or more fiscal years. This is so that you can see how often they pay dividends to their shareholders. Obviously, the more often a company pays dividends, the more likely they are for you to judge their stock as one of the highest dividend paying stocks.