Dividend Stocks are a great investment vehicle for those who want to see their money grow, while getting paid a yield on their money along the way to financial freedom.
A stock dividend is defined on Investopedia as: “A dividend paid to shareholders in the form of additional shares in the company, rather than as cash. Stock dividends are not taxed until the shares granted are sold by their owner.“
Dividends are paid to shareholders as a sort of reward for holding the shares through a certain time frame which in theory is an incentive for shareholders and traders to become long term investors of said company.
DATES TO REMEMBER WITH DIVIDEND STOCKS
Announcement Date: The company announces an announcement date or declaration date, and this must be approved by shareholders.
Ex-Dividend Date: The date that an investor must purchase the dividend paying stock by in order to receive the next payout.
Record Date: This is the cutoff date, that the company must determine for shareholder eligibility for the distribution.
Payment Date: The date in which the shareholders get paid the dividend.
HOW TO PICK WHICH DIVIDEND STOCKS TO BUY?
When it comes to pick any investment vehicle there are a series of questions you should ask yourself.
- What is your time horizon?
- What are your goals?
- What type of lifestyle do you want to live?
- What tax advantages are you looking to achieve?
- What is your risk tolerance?
DIVIDEND STOCK TO WATCH IN 2022
REALTY INCOME
Realty Income is a Net-lease real estate investment trust which pays a monthly dividend to its shareholders. Realty Income owns over 11,000 properties across a vast landscape with millions and millions of square feet inside their portfolio. When it comes to investing in the real estate sector there are a few things to keep in mind; What type of properties are under management? Are these A+ grade properties? Are these properties leased by businesses which are recession proof? Are all tenants paying rent?
Realty income focuses on leasing to companies which are in fact quite recession proof in our opinion and see future rent increases only helping the company become more and more profitable, which hopefully means even more dividend increases for its shareholders.
Realty income currently offers a forward dividend yield of 4.04%. This might seem low for a REIT but keep in mind that you are paying a premium for investing in such a high-quality REIT like this one. And also, with the recent bullish uptrend Realty income has experienced it is only making that yield shrink more and more.
T. ROW PRICE GROUP, INC.
T. Row Price Group is one of the largest publicly owned investment managers in the world. The firm provides investment service to large companies, individuals, institutions, and more. The firm has been a strong buy on our radar since the height of the recent market plunge in 2022. The firm does not only offer significant upside potential in the near or midterm future perhaps, but also pays a strong dividend with a long history of raising their dividend historically. T. Row has35 years of dividend growth to be exact. This means that if you were to invest in a company like this, you will not only hope to capitalize on long term share price appreciation, but also you will continue to get paid for year after year for just holding tight to your shares.
T. Row price is what many investors would consider the perfect ‘Dividend growth’ mix. This is because the stock has grown in price consistently over the last 10-20 years, but like we said earlier it also pays a strong yield along with that.
T. Row Price currently offers a forward dividend yield of 3.85%. This is higher than most other dividend growth names you will find with the same quality of fundamentals at this time in our opinion.