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Dividends are useless, because the stock falls in value relative to the dividend when it is paid.
But what if you prefer that steady income? It’s a honest question.
Dividends are useless, because the stock falls in value relative to the dividend when it is paid.
Earlier quoted context omitted.
Dividends allow you to obtain money from the business without giving up control. Small distinction, and only really relevant to those with large holdings.
Dividends as a concept are excellent, because they allow generating income on an appreciating asset. But I've seen exactly none that beats the S&P 500 on a long timescale, even with dividends reinvested.
What is laid out here is called "yield chasing". Companies with extraorbitant dividend yield often end up losing much more on a 5Y timescale. There are very, very few companies that pay more than 3% and not end up losing money on the long run. (And even that is very bleak compared to just a vanilla S&P 500 yield). If there was a "magic bullet" high yield stock, everyone would flock and buy that one.
What is laid out here is called "yield chasing". Companies with extraorbitant dividend yield often end up losing much more on a 5Y timescale. There are very, very few companies that pay more than 3% and not end up losing money on the long run. (And even that is very bleak compared to just a vanilla S&P 500 yield). If there was a "magic bullet" high yield stock, everyone would flock and buy that one.
> to get feedback, in particular, about monetizing Why should I care about high dividend yield? FINRA prohibits "selling the dividend"[1], and this project seems one step removed. Not illegal or necessarily deceptive, but seems closer to unsound than sound investing advice. [1]: https://www.investopedia.com/terms/d/dividend-selling.asp
Dividends are useless, because the stock falls in value relative to the dividend when it is paid.
Money in the pocket. If you trust the company you assume that the stock will recover the value eventually.
What is laid out here is called "yield chasing". Companies with extraorbitant dividend yield often end up losing much more on a 5Y timescale. There are very, very few companies that pay more than 3% and not end up losing money on the long run. (And even that is very bleak compared to just a vanilla S&P 500 yield). If there was a "magic bullet" high yield stock, everyone would flock and buy that one.
Any company that has paid a dividend and whose stock price has crashed will have a high yield on paper. Those stocks are usually better to avoid rather than rush to buy someone else’s problem investment.
* Why "monthly"? There may be higher quality companies that pay quarterly. Why exclude them?
* Have you looked at the myriad dividend ETFs? Things like SDY showcase funds that have regularly raised dividends YoY. ETFs may be a better way to get consistent yield and yield growth. Look into SDY, DVY or higher-powered div rates with SDIV, SRET.
* Lots of people noting tax treatment of divs as well as pointing out the "dividend irrelevance theory". Tax treatment will vary depending on the type of income. If you're looking purely at equity dividends then they will most probably be treated as income. However, with ETFs you may be exemptions depending on the income source. For example US Treasury ETFs that pay dividends are exempt from US State taxes (look at Bondbloxx suite of treasury ETFs). Municipal bond ETFs are exempt from both state and federal tax in most cases.
* Dividend irrelevance: If a $100 stock pays $1 div then its stock price is adjusted to $99. So there's no free lunch. The point is you want cash-flow generating businesses where management has decided they don't really know what to do with extra cash laying around so they hand it back to their shareholders. Being able to consistently generate these dividends and GROW the dividends indicates typically high quality, value stocks. The short-term end of the yield curve is yielding 5.4% (https://www.ustreasuryyieldcurve.com/) right now... so a company would -- very broadly speaking -- need to engage in projects with hurdle rates greater than what they could get in very safe bets with the US Government.
* Other forms of yield harvesting or income generation are writing OTM calls. A consistent strategy can be found in ETFs like JEPI or XYLE
* Re: monetizing your site. The web is awash with finance websites. This data can be found in a screener tool (finviz.com amongst many). People want trading ideas, so maybe this is better served as a newsletter or similar. Also, why should I trust your site. Financial data is notoriously finicky. Old data gets re-stated. What are your data sources?