High yield dividend stocks are one of the best way generating passive income. When you invest in some safe and high paying dividend stocks, you can assure they will keep paying you healthy dividend month after month. You can invest the dividend back to the stocks and eventually get even higher dividend. This is a great way to be wealthy as we all know, compound interest is the eighth wonder of the world.
What is a Dividend Stock?
Dividend stocks are the stocks which usually distributes the firm’s earning to it’s investors. Most companies pay dividend each quarter but there are some companies which also pays monthly dividends. Some top firms increase their dividend payout ration year over year, these are the dividend stocks which are good for passive income portfolio. Once an investor gets dividend, he or she has choice to re-invest it or not.
If you want to learn more how Dividend stock works and more details on some key terms such as payout ration, YTY growth, dividend dates, than go through my article.
How to invest in High Yield Dividend Stocks ?
Investing in dividend stocks can be tricky if you want to do your own research but it can be very easy as many publications provides list of high yield dividend stocks frequently. If you trust them, all you need to do is invest in them.
So assuming you wants to find a dividend stock yourself, here are some steps to find a good dividend stock.
Screener for Dividend Stock
When you look for a high dividend stock, there are many financial websites which can help you. One good screener is Finwiz. SeekingAlfa is another great site which I use to analyze the stocks and it’s fundamentals.
When I search for dividend stock, I usually look for dividend yield greater than 2%. One important aspect to look into here is dividend growth and payout ratio. If a stock is growing it’s dividend year over year, it is a good sign. This shows, most likely the company can continue it’s dividend in upcoming years. Another aspect to look is payout ratio. In my opinion a healthy payout ratio is between 20% to 70%. If a company is paying more than 70%, it is not sure how long they can continue paying such dividend.
Top High Growth High Dividend Stock List:
- MMM
- KO
- JNJ
- AAPL
- T
- VZ
- MO
- WMT
- KMB
- ED
- CLX
- GD
- XOM
Above list is just an example some high dividend growth stocks which are safe for a dividend portfolio. I have a list of more invested in my personal investment account, If you wants the list, please contact me in the comment.