Dividend Stock Investing is a Different World and So are DRIPs

[william the wie]

Dividend ReInvestment Programs are usually lower in acquisition costs because the company wants to issue more equity at low cost to the company itself and this often includes discounts to market price to bypass underwriting fees. three percent off is common and even five percent is not rare. Another way to make money from DRIPs is to transfer out round lots to your brokerage while leaving enough shares in to maintain the DRIP account. In your brokerage account you can write covered calls in your DRIP account you cannot do so. Those premiums whether exercised or expired give you more money to reinvest at lower acquisition costs through your DRIP account.

Dividend Stocks are cash cows are subject to acquisition at a premium with very little notice but the really big money comes when and if they hit either two or five years of increased dividends because there are actual lists of stocks that achieve this goal and ETFs that buy the stocks that meet these metrics. Just as importantly the companies that do not manage to repeat the performance that got them on the list get dumped from the list. Then their price drops and just like with bonds the yield necessarily goes up.

Does this sound like an idea that can be explained easily to people who need help digging out financially?

 

[Pavel Svinchnik]

Dividend ReInvestment Programs are usually lower in acquisition costs because the company wants to issue more equity at low cost to the company itself and this often includes discounts to market price to bypass underwriting fees. three percent off is common and even five percent is not rare. Another way to make money from DRIPs is to transfer out round lots to your brokerage while leaving enough shares in to maintain the DRIP account. In your brokerage account you can write covered calls in your DRIP account you cannot do so. Those premiums whether exercised or expired give you more money to reinvest at lower acquisition costs through your DRIP account.

Dividend Stocks are cash cows are subject to acquisition at a premium with very little notice but the really big money comes when and if they hit either two or five years of increased dividends because there are actual lists of stocks that achieve this goal and ETFs that buy the stocks that meet these metrics. Just as importantly the companies that do not manage to repeat the performance that got them on the list get dumped from the list. Then their price drops and just like with bonds the yield necessarily goes up.

Does this sound like an idea that can be explained easily to people who need help digging out financially?

What do you think about preferred stocks that pay a high dividend rate?

 

[william the wie]

Not my area of expertise. Marathon Mike is the guy to see on that front

 

[MarathonMike]

Dividend ReInvestment Programs are usually lower in acquisition costs because the company wants to issue more equity at low cost to the company itself and this often includes discounts to market price to bypass underwriting fees. three percent off is common and even five percent is not rare. Another way to make money from DRIPs is to transfer out round lots to your brokerage while leaving enough shares in to maintain the DRIP account. In your brokerage account you can write covered calls in your DRIP account you cannot do so. Those premiums whether exercised or expired give you more money to reinvest at lower acquisition costs through your DRIP account.

Dividend Stocks are cash cows are subject to acquisition at a premium with very little notice but the really big money comes when and if they hit either two or five years of increased dividends because there are actual lists of stocks that achieve this goal and ETFs that buy the stocks that meet these metrics. Just as importantly the companies that do not manage to repeat the performance that got them on the list get dumped from the list. Then their price drops and just like with bonds the yield necessarily goes up.

Does this sound like an idea that can be explained easily to people who need help digging out financially?

What do you think about preferred stocks that pay a high dividend rate?

I owned preferred stock back in the day but I prefer common stock. Preferred stock is more like owning a bond in that the dividend is fixed and stable. But the dividends are taxed as ordinary income whereas qualified dividends from common stock are taxed at capital gains rate. Whether you are going for preferred or common stock and wanting a solid dividend I would not chase super high dividend payouts. Look at the company's dividend history and how consistently they have raised it over the years. Preferred stock has a unique symbol from the common stock so make sure you type in the right one! Good luck.

 

[william the wie]

Dividend ReInvestment Programs are usually lower in acquisition costs because the company wants to issue more equity at low cost to the company itself and this often includes discounts to market price to bypass underwriting fees. three percent off is common and even five percent is not rare. Another way to make money from DRIPs is to transfer out round lots to your brokerage while leaving enough shares in to maintain the DRIP account. In your brokerage account you can write covered calls in your DRIP account you cannot do so. Those premiums whether exercised or expired give you more money to reinvest at lower acquisition costs through your DRIP account.

Dividend Stocks are cash cows are subject to acquisition at a premium with very little notice but the really big money comes when and if they hit either two or five years of increased dividends because there are actual lists of stocks that achieve this goal and ETFs that buy the stocks that meet these metrics. Just as importantly the companies that do not manage to repeat the performance that got them on the list get dumped from the list. Then their price drops and just like with bonds the yield necessarily goes up.

Does this sound like an idea that can be explained easily to people who need help digging out financially?

What do you think about preferred stocks that pay a high dividend rate?

I owned preferred stock back in the day but I prefer common stock. Preferred stock is more like owning a bond in that the dividend is fixed and stable. But the dividends are taxed as ordinary income whereas qualified dividends from common stock are taxed at capital gains rate. Whether you are going for preferred or common stock and wanting a solid dividend I would not chase super high dividend payouts. Look at the company's dividend history and how consistently they have raised it over the years. Preferred stock has a unique symbol from the common stock so make sure you type in the right one! Good luck.

Does this sound like an idea that can be explained easily to people who need help digging out financially?[/QUOTE]

Thanks for covering while I was at prayer service.