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-   -   Why not settle for 20+% yield Dividends? (https://www.thehulltruth.com/dockside-chat/199109-why-not-settle-20-yield-dividends.html)

thundra 12-10-2008 06:54 AM

Why not settle for 20+% yield Dividends?
 
I know of some stocks out there that have some incredible dividend yields and one in particular that has a 24% yield/$2.40 a year per share. If the stock is really low, the company is good and not going anywhere for a while and the stock price is only going up from here on, might it not be a wise thing to just park some money in the stock and collect the easy 20-24%?

spearfish3 12-10-2008 06:57 AM

Re: Why not settle for 20+% yield Dividends?
 
If the dividend is that high, it is likely to be cut. It is not that easy..... Good Luck

bamaboy473 12-10-2008 08:19 AM

Re: Why not settle for 20+% yield Dividends?
 
....hell yeah, but I'm a sucker for long blond hair and big funbags, too. Seriously, if the company (and it's dividend) were that sound, their stock price wouldn't be so depressed.

The reason dividend yields get out of sight is that investment types are pretty darned sure (think... Positive) that the company is going through a rough time from which it might not emerge. The first quick source of cash flow is dividend money; if a company is desperate for cash, then eliminating the dividend is a harsh but viable direction. Of course, news of a sliced dividend can result in the stock's price dropping from $10 to $1, so there's that.

Be careful betting against the investment bankers....they know more than we ever will.

Sprockets 12-10-2008 09:39 AM

Re: Why not settle for 20+% yield Dividends?
 
Many of the high dividend stocks are royalty stocks. Take a look at the share price activity. A 20% dividend doesn't do much if the stock goes down 2% a month.

PROFINITY 12-10-2008 11:22 AM

Re: Why not settle for 20+% yield Dividends?
 
AVOID

If it seems to good to be true....

The advice you have been provided is good. Even is it were a royalty stock the yield is NOT safe. The yield is where it is for a reason.
HIGH REWARD = HIGH RISK.

thundra 12-10-2008 12:33 PM

Re: Why not settle for 20+% yield Dividends?
 
The reason why I ask is that I see a list of stocks, a lot of energy and mineral/commodity stocks, and for example, CPNO or NAT, an energy and a Tanker Company, not companies that are going under anytime soon, stocks beaten down just like every other but are now on the way back up, that are yielding about 19%. The companies I've been considering and even bought from today, have been steadily increasing dividends and their futures, on paper, look really, really good. I welcome the advice, thanks.

I can't help but to think that as the stock prices have, for the most part, been beaten down for whatever reasons, the dividend yields go up since the prices are now so low. Must it also help when Insiders have bought recently as well?

LI Sound Grunt 12-10-2008 01:02 PM

Re: Why not settle for 20+% yield Dividends?
 
The current GM yeild is 20% it was 24% a few days ago. Take a look at the recent price history and latest news before you jump in. It may very well be their last dividend for a while.

spearfish3 12-10-2008 06:33 PM

Re: Why not settle for 20+% yield Dividends?
 
Thundra,

Look at what their underlying commodities have done. Those dividend yields are trailing, NOT forward. The future dividends and earnings are based off of current prices. I would do a lot of homework before I put any money to work in these stocks. They may be good plays long term, but I would not play on an "easy" 20%+ return.


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