How to Find Stocks With High Dividend Yields

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Although most people invest in stocks primarily because they hope the share prices will rise over time, buy low and sell high, dividends are a somewhat more predictable way to make money in stocks. Dividends are payments made by the board of directors to shareholders, usually on a quarterly basis. Like the interest on a back account, dividends generally aren’t a huge amount of money, but the payments can really add up over time. To get the most from dividends, you’ll need to find stocks with high dividend yields.

Things You'll Need

  • computer with online access
  • library access (optional)

Find Stocks with High Dividend Yields

Go to a website with searchable stock information, such as the one linked in the resource section at the bottom of this page.

Pick the percentage dividend yield you would like to find stocks for. If you don’t find any stocks in that range, pick a lower percentage. Generally, a dividend yield of three percent or more is considered high.

Search the web for lists of stocks with high dividend yields. You can sometimes find lists of picks on financial websites. Stock research companies such as Value Line often publish lists of stocks with high dividend yields. You can subscribe to these research services, or you may be able to use them for free at your local library.

Research the stocks with high dividend yields carefully. You won’t make money on a stock that loses a lot of its value, even if it has a high dividend yield.

Consider reinvesting the dividends of the stock to help make more money. You may be able to set up an automatic dividend reinvestment program through your stock broker, or you may keep the dividends in a bank account and then invest them yourself.

Tips & Warnings

  • Be sure to consider the tax consequences of automatically reinvesting dividends. In most accounts, the reinvested dividends count as purchases. This can cause difficulties in computing your cost basis in the stock, and possibly cause problems with wash-sale rules if you sell the stock at a loss shortly after reinvesting dividends. In certain retirement accounts, such as Roth IRAs, you may not have to worry about the tax consequences of automatically reinvesting dividends.
  • Be sure to research stocks carefully before investing. Dividend yields are not guaranteed returns and may be changed at any time. Money invested in stocks is not federally insured, like a bank account. It is possible to lose money by investing in stocks.

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