Investing in Dividend Stocks can be confusing. This video attempts to clear up what a dividend is and how to find dividend stocks.
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Can you go over how and when to reinvest dividends (should you do this quarterly or so)? And for the example of PPL, how did you calc the $152 yearly? So 100 shares ($34.56 each) and 1.52 yield = $152 yearly?
I see how you got confused with the dividends because some websites say their dividend is $1.52 and others say $0.38. I always look at the percent first, which is 4.42% annual dividend, which you can then do the math and realize that it mus be $1.52 per year and not $0.38. If each shares pays you $1.52 per year, and you have 100 shares it would be $1.52 x 100 shares which would give you $152 at the end of the year. As for reinvesting dividends, I might recommend setting up a dividend reinvestment program, also known as DRIP. It automatically buys more shares with the dividends that you receive. So for example if you had DRIP, at the end of the year you would probably have about 105 shares of PPL instead of 100 because it automatically reinvested the money you received in dividends. Hopefully that helps clear up a few things. Feel free to keep the questions coming!
CAPITAL SOLUTIONS that explains it. So say I want to invest in 50 shares in Staples: currently $9.18 per share w/ 5.19 yield. So I would just multiply 9.18 x .0519 = $.47 to get quarterly $ per share, and then $.47 x 4 (quarterly) x 50 (shares) = $94 for 1 year in dividends. Did I do that correctly?
Almost, but not quite! It would actually be 9.18 x .0519 = $0.47 and that’s for the entire year. So you would actually be receiving 1/4 of your answer which would be 50 x .47 = $23.5 for the year. One more thing I should add is that the percentage for the dividend can fluctuate as the price of the stock goes up or down. That is why people typically calculate dividend profits by using the set rate which in this case is $0.12 per quarter. Trust me this stuff took me a long time to learn. it might be a little confusing now, but you’ll get really god at understanding al of this stuff soon. Keep up the good work!
CAPITAL SOLUTIONS welp that answer is a bit underwhelming tbh. Maybe I should get more shares or something… I know I’m not going to get rich quick lol but that example I gave doesn’t sound as good now…