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Monthly Dividend Stocks: How to Get Paid Each Month
Monthly dividend stocks appeal to income investors for several reasons. Stocks that pay dividends monthly provide more predictable income and make it easier to budget, especially for those living off dividends in retirement. Most companies pay dividends on a quarterly schedule, which can result in a lumpier income stream. Monthly dividend stocks better match income with monthly expenses such as mortgage and utility payments to make budgeting easier. Monthly dividend-paying stocks come with another potential benefit as well – faster compounding. Simply put, the more often we receive dividends, the faster we can reinvest to buy more shares and generate even more dividend income. Stocks that pay monthly dividends allow us to potentially increase the number of [...]
Dividend Payout Ratio: How to Calculate and Apply It
The dividend payout ratio is one of the most informative and popular metrics used to analyze the safety of a company's dividend. However, many investors do not realize the number of different ways that dividend payout ratios can be calculated and the other factors that should be considered when assessing the safety of a dividend. Gaining an understanding of the dividend payout ratio can help income investors make better decisions, avoid riskier dividend stocks, and improve the quality of their portfolios. What is a Dividend Payout Ratio? Simply put, a dividend payout ratio reports the proportion of a company's profits that are paid out as a dividend to shareholders. Income investors like to review a company's dividend payout [...]
Qualified Dividends: What You Need to Know to Lower Your Taxes
In the spirit of tax season, it's worth reviewing the differences between qualified dividends and ordinary dividends. While not the most exciting of subjects, understanding what you can do to maximize the amount of your dividends classified as qualified instead of ordinary can potentially save you thousands on your tax bill - and it only takes a few minutes to learn. Each year, we receive a 1099-DIV form in the mail. Banks, brokers, and others are required to issue this form to taxpayers and the IRS to report the total dividends and other distributions that we earned during the year. You can see the list of information reported on Form 1099-DIV below, and we will focus on the first two [...]
Flowers Foods (FLO): Predictable Dividend Growth and a 3.2% Yield
Flowers Foods (FLO) is a reliable company in the consumer staples sector that currently offers a reasonable valuation, a safe 3.2% dividend yield, and above-average dividend growth potential. The business has been very good to shareholders over the last decade as well. FLO’s stock delivered a 12.9% annualized return from 2006-2015, handily beating the market’s 7.4% annual return. The company’s annual dividend payments also ballooned from 9 cents per share in 2004 to 57 cents in 2015, representing an 18% compound annual growth rate. We are interested in Flowers for our Top 20 Dividend Stocks and Long-term Dividend Growth portfolios. Let’s take a closer look at the business. Business Overview Flowers was founded in 1919 and [...]