Dividend Rate vs. Dividend Yield: Which is better?

Investing Strategies Technical Trader's Sanctuary
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Dividend Rate vs. Dividend Yield: Which is better ?

A company’s dividend or dividend rate is expressed as a dollar figure representing the full amount of dividend payments expected. Meanwhile, dividend yield is a percentage representing the ratio of a company’s annual dividend compared to its share price.

IHD has a buy signal with Simon Sez III. Currently sitting at $5.15 today. 3/17/23.

WBA has a yield of about 4.11 % and paying 0.48 cents per share per Quarter.

CVS has a yield of about 2.62 % and paying 0.61 cents per share per Quarter.

IHD has a yield of about 13.81% and paying 0.18 cents per share per Quarter. I wouldn’t own IHD for dividends but would swing trade it earning more money than HOLDLering for pennies.

AGNC has a yield of about 11.79 % and paying 0.12 cents per share per month or 0.36 cents per Quarter. I own 1400 shares.

O has a yield of about 4.23% and paying 0.25 cents per share per month or 0.75 cents per quarter. I currently own 200 shares. Every 5 weeks I get to buy more shares in rotation.

CVS is the winna winna chicken dinner.

I am only interested in Dollars and Cents. IMHO, Yields don’t pay the rent or put food on the table.

Has to pay greater than $0.11 cents per Month.

Has to pay greater than $ 0.34 cents per Quarter.

Has to pay greater than $ 1.34 annually.

If any of them fail to pay per my requirements for 2 quarters straight, they are fired and find another one in its place.

I have 25 stocks in M1 finance on auto pilot and about 45 - 50 monthly dividend paying stock portfolio.

re: GenExDividendInvestor

How to Become a Millionaire / How to Become Rich

Copy his portfolio of 25 stocks.

How to Build the BEST 3 Fund Portfolio (2x Returns With These ETFs) - YouTube - via M1 Finance

My Dividend Portfolio is on M1 ➜ The Finance Super App | M1 Finance same as the above but on autopilot when set up.

I'm Retiring With $20 Million ONLY Buying VOO (Vanguard S&P 500 Index Fund ETF) - YouTube ONLY Buying VOO

2023 Monthly Dividend Stocks List | See All 86 Now | Yields Up To 19.8% I keep getting this Suredividend for FREE after I down loaded one of their monthly spreadsheets. Other it costs a few dimes.

Peruse thru all the way to the bottom of more lists you may be interested in.

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Quill,

Kudos to you for posting on a topic of presumed interest to all of us. But permit --if you would-- to suggest that, though ‘rate’ can be separated from ‘yield’ --as you do in your own investing–, it shouldn’t be, nor should either be separated from ‘risk’. So let me work through an example.

You mention Realty Income Corp [ticker O], and you are willing to accept its 4.85% yield. By contrast, the 13-week T-Bill is offering 4.888%, and its interest is exempt from state taxes, which bumps the effective yield for many of us even higher. (In my case, 5.37% for an instrument of demonstrably lower risk and higher credit quality.)

Realty Income holds leases in commercial real estate. Have you checked the declining occupancy rates in that sector recently? How many of its tenants are walking away from their leases, or will soon do so as the economy continues to crash? In short, commercial real estate --and derivatives based on it, which is what a REIT like O is – isn’t a risk-free bet. Just the opposite. The whole sector is a short and a disaster waiting to blow up that the Fed/Treasury cartel won’t be bailing out.

Realty Income’s current price is $61 and change. (Call it $61.50 for the point I’m going to make next.) But from Apr '21 to Aug '22, O was trading in a sideways channel that ranged between $72 and $66, or an average price of $69 for all shares bought during that period. So, do the math. If you pay an average of $69 dollars per share for something that’s now worth $61.50, you’ve lost $7.50 per share, or nearly twice what you might have received in divs. If that isn’t trading elephants for rabbits, then give me another name for it.

There are smart ways to play the divvie stock game, and there are dumb ones. Not paying attention to risk-adjusted total return is one of them. That means that ‘yield’ matters relative to the risks that have to be taken to receive it and that one’s principal has to be preserved or increased.

Yeah, for sure, back in the day, when Geraldine Weiss was touting divvie stacks, they were A Good Thing. But that was 30 years ago before the US decided to gut its manufacturing base and switched its economy from actually making thing to financial engineering. In recent years, where have most stock dividends come from? Not from sustainable economic activities, but from the Fed’s nearly free money. Now that scam is winding down.

That said, and as you know, I own divvie stocks/ETFs, and I added another 20 positions today. But my positions are small, and they total at most 2% of AUM, because I know the divvie gig is just a risky, speculative bet that’s as likely as not to blow up before summer comes, or by year’s end at the latest.

Arindam

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I’m just learning about treasuries and looking at dividends for the first time. Thanks for this discussion.

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Peruse at your leisure. Topic 4 week Laddering

Treasury Bills — TreasuryDirect looking for 4weeks schedule.

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re: Realty Income Corp [ticker O]
re: Main Street and Main Inc. [ticker MAIN]
re: AGNC Investment Corp [ticker AGNC]
re: Gladstone Commerical Corp [ticker GOOD]
re: AMSL Holding NV [ticker ASML]
re: Marketbeat.com it is FREE.

I am not a HODLer but a Swing Trader using the Simon Sez III principle.

Review the chart and see how many successful trades earning a substantial amount of money and then notice the D at the bottom of the chart as a reward for investing in the company.

What is a good yield for a stock?
between 2% and 5%
The average dividend yield on S&P 500 index companies that pay a dividend historically fluctuates somewhere between 2% and 5%, depending on market conditions. 5 In general, it pays to do your homework on stocks yielding more than 8% to find out what is truly going on with the company.

I have seen 20% yielders drop down to 4 percent.

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O
O1249×830 77.9 KB

Forgot the chart for O

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Thanks for this information!

I noticed that Arc doesn’t recommend Treasure Bill ladders for less than $2M. Is that also true for an ETF, as well?

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“I noticed that Arc doesn’t recommend Treasure Bill ladders for less than $2M. Is that also true for an ETF, as well?”

beginner,

Whoever made that recommendation is an idiot who knows nothing worth knowing about investing. Ignore them.

Here’s the real skinny. If bought through Treasury Direct, the purchase-amount for a bill (4wk, 8wk, etc.) can be as little as $100. Thus, with just $400 bucks, one could set up a treasury ladder. Now here’s the grim reality. The “average” American doesn’t have even $400 in savings. They are broke, and they are unaware of how to make good financial decisions for themselves, because them who really run this country want there to be massive debt slavery. So, what to do?

#1, Spend less than you earn. #2. Get yourself debt-free. #3. Start edging into markets and investing in small steps, like building a 4-week T-Bill ladder to have an emergency fund. (A couple of thousand total is a reasonable and obtainable amount, not the typically advocated 3-6 months of living expenses.) Then, should an emergency arise like needing a new fridge, you put it on the credit card, but let the rungs of your T-Bill ladder roll off and use the cash now available to pay off the card before interest charges accrue. #4. As one’s savings begin to build up, you begin to explore the stock or ETF markets, buying single shares to test your ability to see and to act on opportunities. As savings, skills, and confidence grow, you increase your position sizes. Wash. Rinse. Repeat.

This investing stuff ain’t rocket science, and these days, there are more educational resources available than any two people could exhaust in a lifetime. Ask Quill if he isn’t still learning new things, and this is after four decades of doing this stuff. Same-same with me. The learning never ceases. But it doesn’t have to continue. Once one has reached one’s own goals, the investing process can pretty much be put on auto-pilot if that’s what makes the most sense, given all the other thing in life one might want to do.

Now here’s yet more skinny on buying T-bills. Most brokers will buy bills for you at auction without commish. But the mins now jump to $1k per bill, and at some brokers (e.g., E*Trade), the min ticket is 5 bills. Typically, the 13wk and 26wk bills auction on Monday and settle 3-5 days later. The 17wk auctions on Weds. The 4wk and 8 wk on Thursday. Newly-issued bills are ‘on-the-run’. Previously-issued ones are ‘off the run’. But here’s where things create an opportunity. A 26wk bill issued 13 weeks ago has 13 weeks remaining to maturity. Therefore, it should be priced the same as a 13wk bill at auction. But ‘off the run’ bills trade at a slight discount that --nonetheless- is often enough to offset the markup assessed by the broker when they are bought in the secondary market and still offer a higher yield to boot. Thus, sometimes, rather than wait for an auction and then wait for settlement, it makes sense to buy that day in the secondary market and be done with it, right then and there.

Schwab is a horrible broker through whom to buy corporates, agencies, munis, etc. But Schwab is for superb for Treasuries --primary market or secondary-- if one can meet the $1k per bill min. Otherwise, buying through Treasury Direct is the best way to go. Also, though our dear gov’t does a lot of horrible things, they do a superb job of running the Treasury website, and the security of one’s account and identity is as good or better than that of all the other financial instutions one typically deals with. (IMHO, 'natch. But I’ve been dealing with them for 30 years and still have no complaints.)

Lastly, if you don’t already have an account at Schwab, then open one by taking advantage of their Starter Kit Offer (linked below), whose skinny is this. They’ll give give you fractional shares 5 stocks with a current market value of $101 if you’ll deposit $50 and that you can trade out of immediately. SCHAZAMM! For putting up $50 bucks, you’ve tripled your money. Meanwhile, you’ve gained access to a decent shop with decent research tools and, also, a truly superb trading platform once Think or Swim is brought over and TD AmeriTrade and Schwab are under one roof.

Arindam

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Who are you?! You are so sweet and kind.
I am learning learning learning but I am kind of sick of it. So, I appreciate the idea of putting this on autopilot.
I need to learn some more about the basics. Like whether schwab took a fee or i got the same as on treasury direct for the 17-week treasury I bought.
I kind of learned how to dive a bit but not float or dog paddle. :slight_smile:
I’m not used to being so precise and working out to whatever decimal place i need to and I want to learn that.
Also, learning about BEY and simple interest. It’s hard to learn through books and the internet. I may find a
tutor. I know an advisor that works on fee only. Maybe she can go over this stuff with me. Hope she doesn’t try to sell
me a long term care policy, but then who knows. It’s a lot!

:slight_smile:
Thank you very much.
Maybe I don’t need to be so perfect. a basis point here or there? Maybe if I get something on the plus side I should be happy!
My parents knew nothing about investing. I’m luckier.
I’ll look at the treasury ladder you mentioned. Maybe Quill deals with companies instead of individuals.
On the other hand, in this environment, i want cash available in case Mr. Market has a really bad day. Pennies versus quarters—don’t want to be scared money, either!
I’m learning to juggle…
Then, again, I want to keep it very simple.
Meditate, huh?! I’m all over the place!
Hope you have a sense of humor…

:slight_smile:

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Beginner,

You’re Elizabeth from Manlobbi’s board, right? and I’m Charlie. On either, I sing the same songs and tell the same tales. But TMF’s boards are far better for posters being able to upload charts and to edit their own posts.

The short answer to all of your questions is this. “There are no roads but by walking.” You’ve gotta figure out what you want to do about investing/trading stuff and how you want to do it. But I would suggest this. If the “adviser” you intend to hire can’t support herself by trading for her own account, she’s a fraud, a scammer, a charlatan, and every bad word you can think of whose “advice” will be no better than what Schwab’s ‘Robo Advisers’ can do for you, because they are both working from the same playbook and the same flawed assumptions: MPT, EMH, etc.

OTOH, if she were any good, she’s wouldn’t be trolling for clients. She’d have already closed the doors to new money . Yeah, Catch-22. But that’s the lay of the land. Them who need help can’t find it. Them who could help aren’t often available.

Arindam

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Yes, same Elizabeth. I agree, TMF better for those things. Glad you’re on both.
There are no roads but by walking. My favorite saying. Helps me get going.
And I thought about that regards the adviser. Yeah, where’s her yacht. And how can I waste someone’s time on such basic things as I don’t know how to do!
However, none of my friends know anything about finance, and not my husband.
I don’t know how any of us have done anything. I kind of know things by instinct, but everyone else: Rich parents and Rock star ex-husbands! No need. Paying for advisers!
But I want to learn for my own self. So, I thought maybe this fee-adviser could show me calculations for treasuries and BEY and any other small questions i might have.

I have the equation from the Bond book and the equation from the treasury direct page: "calculate coupon equivalent yield.” They are different!

How did you learn to do the equations? Just the books? How do you know you’re doing the right equation for each variable? and adding them all into the correct interest equation?
I feel like a moron. I’ll look at them again tomorrow, maybe the book and webpage say the same thing just different notation. As I said, the interest calculations are kind of close, i guess. but I don’t know how to check my work, that’s why I thought the advisor could at least help me with the math, at first. Right?

Thanks,
Elizabeth

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“I don’t know how to check my work. That’s why I thought the advisor could at least help me with the math.”

Elizabeth,

You’re wanting an financial adviser to do for you what a teacher/tutor can do. An effective financial adviser --and there are some out there-- doesn’t have the time or patience to deal with a small account --under $5 million-- who doesn’t understand the basic terms and concepts. It’s just not cost-effective for them to deal with such clients.

Teacher/tutors, OTOH, can be hired quite affordably simply by signing up for an investing class at your local college or university. In fact, these days, there are online investing classes. Here’s a link to a cross section of what’s available.

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