17 May 2020
When looking for stocks, just buy the one with highest dividends? More dividends better right?
Not necessarily, think most of the commentors have covered it already. Paying out higher dividends does not mean a stock is better, it may actually be trying to attract more investors to buy their stocks, or to give off a "our company is doing fine" facade, when in actuality they are not doing well at all. Take a look at Telcos Starhub and Singtel - their dividends are consistent and attractive, but they are making losses thus far. Instead, what they should be doing is not keeping up their high dividend paying policy, bite the humble pie and use this retained earnings to reinvest and reinvent themselves to become profitable in the face of stiff competition from traditional telcos and new emerging ones like Circles Life. They are running themselves into the ground paying out their dividends.
Best thing to do - choose the one that fits your investment needs. If you want income (dividends) then you should look for one with extremely strong financial health that can most likely keep up their dividend policy for many foreseeable years to come. If you are looking for capital gain. perhaps a growth stock like Bestworld will do you better.
No, what you want is consistent growing dividends. There are cyclical companies that can give 25% dividends maybe for a year or two and then 0, and then stock price drops.
Invest in good companies instead of good dividends. Good companies will eventually give good dividends.
View 1 replies
It can work both way.
high dividends could be due to it being undervalued.
high dividends could...
Read 6 other comments with a Seedly account
You will also enjoy exclusive benefits and get access to members only features.
Sign up or login with an email here
Write your thoughts