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The Ultimate Dividend Playbook
Dividends may be the most misunderstood aspect of investing in stocks?to the extent people bother to understand dividends at all. As editor of the monthly newsletter Morningstar DividendInvestor, Josh Peters offers sound advice on the long-term investment of capital with dividends as the guide.
Now, in The Ultimate Dividend Playbook: Income, Insight, and Independence...
The Ultimate Dividend Playbook
Dividends may be the most misunderstood aspect of investing in stocks—to the extent people bother to understand dividends at all. As editor of the monthly newsletter Morningstar DividendInvestor, Josh Peters offers sound advice on the long-term investment of capital with dividends as the guide.
Now, in The Ultimate Dividend Playbook: Income, Insight, and Independence for Today's Investor, Peters takes a fresh look at dividend-paying stocks and equips the individual investor for financial success through his dividend-achieving approach. He shows how to put the three dividend plays of income, insight, and independence into practice so that dividends will put cash in your pocket regardless of the fads and failings of Wall Street. Peters also takes you through the insides of a corporation and the factors that allow it to pay and raise dividends, tells how to separate safe dividends from risky ones, and explains how to construct a portfolio of dividend-paying stocks to meet your financial needs.
Filled with in-depth insights and practical advice, The Ultimate Dividend Playbook will help investors find high-quality, dividend-paying stocks to fortify their portfolios for the long haul.
Chapter 1. Income? From Stocks?
Chapter 2. Dividends, Values, and Returns.
Chapter 3. Corporations. Dividend Machines.
Chapter 4. Dividend Insight.
Chapter 5. Dividends Past, Present—and Projected.
Chapter 6. Is It Safe?
Chapter 7. Will It Grow?
Chapter 8. What's the Return?
Chapter 9. Independence.
Chapter 10. Managing a Dividend Portfolio.
Chapter 11. The Future of Dividends.
Appendix 1. The Nuts and Bolts of Dividend Payments.
Appendix 2. Dividends and Taxes.
Appendix 3. Banks.
Appendix 4. Utilities.
Appendix 5. Real Estate Investment Trusts.
Appendix 6. Energy Partnerships.
Appendix 7. Other Dividend Opportunities.
Posted January 10, 2009
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This book is nicely written, with some engaging anecdotes right from the start that clearly explain concepts like dollar cost averaging and the volatile temperament of "Mr. Market".<BR/><BR/>The idea of investing for dividends is a sound idea, particularly if you can get in on the ground floor. If a company with a share price of $1 pays a 5% dividend, then this is 5 cents per share. If the share price grows to $2, then, to maintain the same dividend yield of 5%, the company would pay out dividends of 10 cents per share. Although the reported dividend yield is 5%, YOUR personal yield (because you bought at $1 per share) is actually 10%. This idea of rising dividends is expressed in the book using a very simple equation: the Gordon Growth Model.<BR/><BR/>What this idea also demonstrates, through, is that the idea of "buying low" and "selling high" (i.e. market timing) should not be disregarded entirely when investing for dividends.<BR/><BR/>So far, so good for dividend investing.<BR/><BR/>The problem -- which I explore in "Stock Fundamentals On Trial: Do Dividend Yield, P/E and PEG Really Work?" -- is in screening for stocks that have attractive dividends. Analysts' forecasts can be wrong, sometimes (and recently) quite spectacularly wrong. Furthermore, if you take my opening statement in reverse, it will become apparent that a too-good-to-be-true high dividend yield might be the result of the company's share price plummeting. A declared dividend yield of 5% would appear to be an amazing 20% if the share price suddenly fell from $1 to $0.25. This really did happen to some financial stocks last year.<BR/><BR/>In a nutshell, I'm saying that: dividend investing is a sound strategy, and this book describes it well, but be careful to understand it properly. It's not just a simple matter of "buy a basket of stocks that have the highest forecast dividend yields".<BR/><BR/>Sound strategy, sound book, but beware the subtle dangers.<BR/><BR/>Tony Loton, author --<BR/>"Stock Fundamentals On Trial: Do Dividend Yield, P/E and PEG Really Work?"
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Posted April 17, 2008
Did anyone who read and used this book note that the Formula that Josh Peters used to determine Projected Total Return has noting to do with dividends???? Although he uses dividends in the formulas, they are used in two different places 'funding gap and yield' and end up canceling each other out. So if you lay out the data on a spreadsheet and calculate the values for Yield, Cost of growth, etc. and vary the dividend, the Proj Total Return never changes. How can a whole book devoted to dividends not depend on the dividend?
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