Dividend Paying Stocks

Written by Charles M. O'Melia


Continued from page 1

(Note: Bill Gates and family have already given millions and millions to charity. It was announced on CNBC that on April 24, 2003 Bill Gates had just donated 28 million dollars to S. Africa’s AIDS program.)

Microsoft had just recently (10/15/03) raised their dividend from eight cents a share to sixteen cents a share, giving Bill Gates, I would imagine, a 96.5 million dollar a year raise. As an individual investor inrepparttar stock market for almost 40 years I have found that companies that raise their dividend every year outperform those companies that stop or trim their dividends. For example, Dominion Resources had raised their dividend from 1984 to 1994 every year, and then stopped in 1994. Since thenrepparttar 112448 company continues to pay a 64½ cent a share dividend, with a dividend yield of around 4 percent a year. The stocks performance since 1994 has been mediocre, rising in price fromrepparttar 112449 40 dollar range in 1994 torepparttar 112450 60 dollar range in 2004. Now compare that stock’s performance with Comerica, a company that has raised their dividend forrepparttar 112451 past 35 consecutive years. In April of 2003, Comerica’s stock price was around 37 dollars a share, paying a dividend yield of around 5%. Today, July 20, 2004repparttar 112452 stock closed at $58.28 a share, paying a dividend yield of 3.57%. A $21.00 a share move inrepparttar 112453 stock in 1 year and 3 months and in March of 2005repparttar 112454 company will probably raise their dividend again forrepparttar 112455 36th consecutive year. (Byrepparttar 112456 way, Comerica’s stock performance forrepparttar 112457 past 14½ years (with dividends being rolled back intorepparttar 112458 stock) has returned a little better than 15% a year, compounded annually.) The simple point I’m trying to make is to invest in those companies that have a history of raising their dividend every year. There are hundreds of them. A company that just pays a dividend is not good enough; find those companies with a historical record of raising their dividend every year.

For more excerpts from “The Stockopoly Plan’ please visit www.thestockopolyplan.com

An individual investor with almost 40 years of experience and passion for the stock market. Author of the book 'The Stockopoly plan', soon to be released by American Book Publishing.


The perfect Mutual Fund

Written by Charles M. O'Melia


Continued from page 1

Inrepparttar perfect Mutual Fund your money is not spread too thin. For example, putting $5,000.00 into, lets say,repparttar 112447 S&P 500 Index Fund, you would end up owning around $10.00 worth of 500 different companies. Other thanrepparttar 112448 obvious fact that your money is being spread too thin, any dividends fromrepparttar 112449 companies inrepparttar 112450 Index Fund could possibly be eaten up by management’s operating expenses, advertising fees and whatever other Mutual Fund fees (they’re called ‘hidden fees’)are involved.

Inrepparttar 112451 perfect Mutual Fundrepparttar 112452 valuation of a stock is based on how often a company raises its dividend andrepparttar 112453 company’s stock appreciation inrepparttar 112454 market place forrepparttar 112455 past eight years. It is this valuation that earns it its place inrepparttar 112456 perfect Mutual Fund. The perfect Mutual Fund ignores allrepparttar 112457 other elaborate techniques of security analysis to find value in a stock. I guess you could call it a Jerry Maguire, ‘show merepparttar 112458 money’ security analysis. (Also, in my opinion, too many people spend too much time looking at technical charts trying to predict what a stock orrepparttar 112459 stock market is going to do tomorrow. Just because thousands of people on Wall Street make a living doing ‘technical analysis’ doesn’t mean you have too jump off a building, too.)

Inrepparttar 112460 perfect Mutual Fund it isrepparttar 112461 belief thatrepparttar 112462 dividend isrepparttar 112463 one measure a company cannot fudge. The money has to be there to payrepparttar 112464 shareholder. The earnings, P/E ratio (trailing or forward), price to sales etc. will all fall into place ifrepparttar 112465 company still has enough earnings every year to continue raising its dividend. The perfect Mutual Fund assumes that if a company, for example, that has a history of raising its dividend forrepparttar 112466 past 35 consecutive years; it must be doing something right!

Inrepparttar 112467 perfect Mutual Fundrepparttar 112468 dividends fromrepparttar 112469 companies are also a safety factor that will put a bottom (support) on a stock. The dividend yield/return will keeprepparttar 112470 price of a stock from falling too far, in case of a severe drop inrepparttar 112471 stock market. And, of course, inrepparttar 112472 perfect Mutual Fund,repparttar 112473 lower stock prices accelerate your income.

The perfect Mutual Fund is real!

How to begin and invest in your own perfect Mutual Fund can be found in my book ‘The Stockopoly Plan’. Excerpts fromrepparttar 112474 book can be found at www.thestockopolyplan.com



An individual investor with almost 40 years of experience and passion for the stock market. Author of the book ‘The Stockopoly Plan’, soon to be released by American Book Publishing.


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