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Step 1
Search for published lists of dividend paying stocks that can be leveraged as a starting point for investing. Look at lists like the S&P Dividend Aristocrats as a highly recommended resource of stocks that pay dividends. This list can then be further refined to fit with any other criteria that you may have. Try and avoid using any list of dividend paying stocks as your only source for decision making. Dividend distributions tend to lag behind the health of a company, so you need to be aware of this.
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Step 2
Run a stock screen looking for stocks that pay dividends and compare it against your other lists from step #1. Make sure you look for stocks with a strong dividend yield, low P/E ratio, high projected dividend growth rate, and strong projected future earnings as well as other criteria. Using these types of criteria will help you identify a good solid list of dividend paying stocks.
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Step 3
Refine your list of stocks that pay dividends by comparing your lists and identified securities from the prior two steps. Look at other resources such as memberships, fundamental and technical data, reviews written by professional financial advisers and more. While relying strictly on reviews from third party sources should not be used exclusively, it can help make decisions easier if combined with other data.
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Step 4
Open an online brokerage account (if you don't already have one) as your final step to invest in stocks that pay dividends. Be sure to research out all of the features that come with any potential discount brokers to fit your investment needs. If you plan to be a dividend investor, then be sure to open an account that allows you to reinvest your dividend payments automatically. This is often referred to as a DRIP (dividend reinvestment plan) account.
