? 1. What is investing for income?
The primary goal of any investment is to grow?the?capital or the money?that is invested.
In addition to growing the capital, some investments will also generate income. Some examples of income from investments are the rent from an investment property, the interest from a fixed deposit.
Similarly, while investing in stocks, the dividends paid by the company is the income that is generated from the stock investment.
2. What are dividend stocks?
Stocks that consistently pay dividends are called dividend stocks.
3. Will dividend stocks always pay dividends?
No. There are no guarantees that a company will pay a dividend. Paying dividends to share holders is not a requirement for a company. It is decided by the board of directors based?on the company?s earnings and various other factors.
4. How often are dividends paid?
Dividends are typically paid annually.
5. How do I find dividend stocks?
Dividend stocks can be?picked using screeners and looking at?historic dividend payments of companies.
6. How do I compare the different dividend stocks?
In the case of fixed deposits, the bank that pays the higher interest rate is preferred. Similarly, in the case of dividend stocks, companies with higher dividend yields are preferred.
Dividend yield is calculated by dividing the annual dividend amount paid by the stock price.
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Source: http://mumbaitrader.wordpress.com/2012/02/08/investing-for-income-dividend-stocks-21/
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