Daily Gains Letter

Dividend Yield

Highest Dividend Yield Stocks to Invest in 2015

A dividend is a portion of earnings that is distributed to shareholders of the company. To calculate the dividend yield, which is the annual percentage return based on an initial investment, take the annual distribution by the company and divide it by the priced paid for the company stock. This is one way to compare the payout of different investments.

For instance, if an investor views two companies equally, but one has a dividend yield of two percent and one a dividend yield of three percent, then the investor would choose the stock with the three-percent dividend yield to obtain a greater return on his/her money. Of course, a dividend yield is only part of the equation when considering whether or not to purchase a stock.

Two Underlying Factors You Need to Consider Before Buying Stocks

Don't Invest in McDonald'sWhen many investors think of blue chip stocks, a common name that pops up is McDonalds Corporation (NYSE/MCD). A blue chip stock is traditionally a well-established company generating stable corporate earnings and usually paying out an attractive dividend yield. McDonald’s certainly hits the bull’s-eye on these blue chip metrics, which is especially attractive in today’s low-interest-rates world with its forward dividend yield of approximately 3.3%. The real question to ask is what is McDonald’s potential for corporate earnings growth over the next few years? There are two underlying f ... Read More

Resource Stock Pays Investors to Wait for a Rebound

Stock Pays InvestorsWhen you are looking at your portfolio and considering making adjustments, it’s important to take into account not only the current environment, but what potential changes could occur in the future that can alter your investment strategy. Here’s a perfect example of what I’m talking about: We all know that Japan has been trying to lower its currency in an attempt to stimulate its economy. What’s a side effect of a weaker economy? Higher import prices, and since Japan relies almost entirely on imported energy, costs are rising significantly, which is hurting the average Japanese citizen since wages are not increasing. Just recently, Japan announced that it is now dr ... Read More

Why You Don’t Need Bonds for Income Right Now

Why you don't Need Bonds for IncomeThe flow of capital into the stock market continues to be directed toward lower-beta large-cap stocks and blue chips, and far less into growth and technology stocks. The comparative performance of the large-cap versus smaller-cap stocks also exhibits a movement of capital into bigger companies as the stock market adopts a more defensive structure. The risk in growth stocks is continuing to grip the overall stock market. With the move to safety, we are also seeing some capital flow into the bond market as the yield on the 10-year bond approaches the critical three-percent threshold. The higher the yield, ... Read More

Top-Yielding Stocks to Combat Low Interest Rates

Low Interest RatesFederal Reserve Chair Janet Yellen has confirmed what most already knew. The recovery in the U.S. jobs market is far from complete. Yellen noted that the unemployment rate has improved since the Federal Reserve initiated its last round of quantitative easing in late 2012, falling from 8.1% to 6.6%. Curiously, in 2013, the U.S. economy grew just two percent. That said, against the backdrop of a so-called improving U.S. economy, the numbers of the long-term unemployed and part-time workers are far too high. In fact, 3.6 million Americans, or 35.8% of the country’s unemployed, fall under the “long-term unemployed” umbrella—that is, those who have been out of work for more than 27 w ... Read More

How to Profit from the Dow’s “Dogs”

Small-cap stocksSmall-cap stocks are faring the worst this year and are down nearly 10% from their record-high in late 2013; many would deem this to be an official stock market correction. Given that small-cap stocks surged upward by more than 33% in 2013, it shouldn’t be a surprise to see this group get the brunt of the selling this year. Higher-beta stocks, such as small-cap stocks or growth stocks, tend to outperform when the stock market is moving higher, but they are more vulnerable to downside weakness. This is the risk you assume when investing in small-cap stocks. The reality is that the associated risk of buying st ... Read More

A High Dividend Yield Investment You Can Take to the Bank

DL_Feb_15_2013_JohnA retirement portfolio is more than just a group of stocks. It’s a collection of investments that reflect an investor’s personal preferences, including asset class (stocks, bonds, futures, options, etc.) and sectors (consumer goods, health care, basic materials, etc.). Investment portfolios will also lean more toward being either income or growth oriented. As a result, an income-oriented investor will select different stocks than a growth-oriented investor will. That said, most investors like to have a balance of both. While capital appreciation is a great long-term reward, predictable and reliable income through dividends provides an excellent, steady stream of earnings that can be either paid o ... Read More