Dividend Paying Stocks: What Are They?

Dividend paying stocks are, in the opinion of many investors, superior to every other form of investment. With most investments in the market, you must wait until the stock matures sufficiently and sell it in order to make money. Good dividend paying stocks can provide you with a steady source of income.

Dividend stocks pay their shareholders portions of their profits. Some companies adhere to a fixed schedule for paying out their dividends while others are not so regular. All have a varying return, though, because profits cannot be predicted. Once profits for a certain term have been defined, these companies decide how much of the total profit to reinvest in the business and how much to distribute to their shareholders. Usually, they decide how much to give out per share and then put appropriately sized checks in the mail.

The money that dividend paying stocks send out is described in terms of yield. The yield of such a stock is determined by dividing the current full-year dividend by the share price. For example, if the dividend of a stock worth $50 per share were $5, then the yield would be 10%. That would be a very good yield. In comparison, even very good dividend paying stocks would yield closer to 5%.

What Are Some Good Dividend Paying Stocks?

If you want some guidance in choosing from all the possible stocks that pay dividends, consider some of the stocks on this list. They have paid good dividends in the past year and hold a lot of promise for the future.

• Microsoft

• PG & E

• Toyota Motor Company

• Nestle

These dividend paying stocks represent diverse interests that are all prospering.

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