Did you know 97% of the stock market returns between 1871-2003 came from reinvested dividends?
Dividend paying stocks carry a unique feature that non-dividend stocks lack: the ability to reinvest earnings without doing anything (aka DRIP plans). Your reinvested dividends continue to buy shares whether you trade or not. Most online brokers give investors the option to reinvest dividends automatically without paying any commissions. Unless you need the dividend payments to survive, every investor should reinvest their dividends and take advantage of the amazing power of compound interest.
Recommended Tools for Finding High Paying Dividend Stocks
There are plenty of free tools and resources available online that allow you to search for high quality dividend paying stocks with the click of a mouse.
I recommend checking out the following:
- MSN Money Screener – Set the Dividend yield field as high as possible, and run a basic search to find a long list of top paying dividend stocks.
- Dividend Investor – site is completely dedicated to analyzing and tracking dividend paying stocks.
- MorningStar Dividend Screener – At the end of the search options, alter the dividend yield limit to get better results
- AOL Dividend Stock Screener – Select the High Yield Mid-Cap option under “Key Searches” to find stocks with attractive dividend yields.
- Google Finance Dividend Screener – Adjust the dividend yield field to limit your search results
[...] Finding the best high dividend stocks to invest in can be a difficult task. Investors should be wary of stocks that are paying incredibly high dividends, as its likely the result of a dividend that is soon to be lowered. Investors will rarely push up the dividend yield of a quality stock past 4.5-5% per year, as at that point, the stock is a very likely investment for near cash equivalent status. If the stock were such a good buy, investors would be pouring cash into the firm with 6% yields. It’s “buyer beware” when the dividend yields get a little too high. [...]