Dividend Stocks for Beginners

Investment is one of the crucial decisions to make, whether for personal or business purposes. There are many things to consider before you make it, especially if your company will benefit from it. One of the best ways that those companies do is invest in dividend stocks. But you need to have more information about this matter. You need to make sure that it can be a big help to your company, especially if you are a beginner.

Dividend stocks are an extra payment, which is made in additional shares rather than a payment of cash. Thru this, you can generate your income, and it will help you grow your savings collection for long years. This is a big help to increase the share of your company regularly.

Why should you invest in Dividend Stocks?

Investment is essential when you decided to make the right decision. If you are in the field of business, you need to be wiser enough so that you are assured that it will grow and it will be a big help to your business.

Things will be easier if you have enough knowledge about dividend stocks. It is also helpful if you are guided by those who are expert in this field. Here are some of the reasons why you should invest in dividend stocks.

  • Dividend stocks will produce consistent income streams, and it has the potential for outstanding and longstanding compound returns.
  • Thru this, you can pay shares to stockholders, reinvest in the business, or buy back your stock. Reinvesting is essential for the growth of your business, and at the same time, it can help to maintain a competitive benefit.

As a beginner, you need to have enough reason before you decide to invest in one thing. You need to consider your company. Make sure that you will get a significant advantage in the investment that you are going to do.

Stock Investing

Important Dividend Stocks Dates

If you are one of the beginners in this field, then you should remember some of the important dates for dividend stocks. You need to be aware of this date because it will help you to determine if you will receive the stocks on the next payment of dividend.

  • The pay date is the day when you need to pay the dividend to the shareholders.
  • Record date occurs in two business days after the date of ex-dividend. In this date, you will determine if you already get the dividend.
  • The ex-dividend date is the first day of the trades of stocks without the dividend. When you purchase a shares before the date of ex-dividend, then you are entitled to the payment of dividend, but when you purchase after the date, then you are not going to pay on the cycle of dividend.
  • Settlement date occurs in three business days after the date of the trade. It represents that the purchase is being finalized and you will have the record of the shareholder in the book of the company.
  • The date of trade refers to the day when you purchase the stock.

The given important dates about will provide you with an assurance that you have to undergo the process of dividend stock. It would help if you remembered those dates for you to be guided appropriately by your payment.

Advantages of Dividend Stock for Beginners

Dividend stock is one of the recommended investments for beginners. This will give them a great advantage that will assure them that they have made the right decision. Here are the benefits of choosing dividend stock for beginners.

  • The track of growth record because dividend stock will assure you to have consistent growth to your business or income. The good traits that these investments have will ensure that this is the right thing to do.
  • When you are a beginner, you are aiming to have a good growth to your investment. You don’t also want to fall by a lower amount. In dividend stock, you will have low instability.
  • If you are in a company, you aim to have continues good record. This investment will help you with that goal because of the sustainability traits that it has. It will provide you a firm track record about the payments of dividend.
  • Consistency is one of the excellent characteristics that this dividend stock has. Thru this, you are assured that the growth of income to your company will be achieved.

Dividend Stock Investing

Things to know in Dividend Stocks

Beginners should have some critical information that will help them understand the investment that they are in. It is essential that you are knowledgeable enough about the dividend stock to make it successful. The following information will serve as your guide to do the right thing in the field of investment.

  • Dividend stock is not only about income. Beginners should know the importance of dividend income trap, which is referred to stocks with remarkably high shares.
  • You need to know if you will get paid. Your brokerage account probably has several dates, and you need to pay attention to this detail. This will give you awareness about the process of payment.
  • It would be best if you also enrolled dividend stocks in a DRIP (Dividend Reinvestment Plan) for the all-out prospective.

The investment will not be possible if you will not become wiser in choosing the right choice. You need to have enough information before you go for investment, especially when you are a beginner. There are many things to consider for it to be successful. The given information above will help you a lot, and you will be assured that you have made the right decision.

Dividend stock will assure you that you are on the right track. This is the best investment that you are going to make for your company. You will never regret choosing this because it is proven and tested for many years. Do not hesitate to trust this because the information given to you is reliable and proven.

How to Buy Stocks the Right Way

Buying and selling stocks is an easy task – you can find clear instructions on your favorite online stock broker on how to properly use their trading platform. However, if you want to yield higher rewards in the long term, you need to learn all the fundamentals of stock investing – how to pick the right stocks that can generate high profits in the stock market.

In this article, you will find all the necessary information on how to buy stocks. Here’s all that you need to know:

1. Getting to Know How Stocks Make Money

When purchasing a company’s stock, you are buying an ownership share in that particular company. In fact, there are two ways to generate profits from stock investment. First, you can hold onto your shares and benefit from the dividends, which are the portion of the earnings of a company distributed to the different shareholders.

Typically, dividends are distributed quarterly, which makes it a great way to gain a steady stream of profits. Second, you can sell your shares for a higher price than their initial one. For instance, you can purchase 100 shares of a company’s stock at $10 per share. Then, the price rises to $15 per share during the next several months. By that time, you can sell all your shares at a higher price and make $500 of profit on the sale.

How Stocks Make Money

2. Long-term Thinking is the Key to Success

Many investors get into the stock market business in the hopes of gaining high profits within a short period. However, the truth is that generating high revenues in the stock market is a slow process which requires a lot of patience and persistence. That’s why you need to adopt a long-term strategy when investing in individual stocks. It is quite simple: look for great companies to invest in, then hold onto the stocks for longer periods.

3. Look to companies you understand

As long as you are familiar with the company and have a good understanding of how it makes money, you won’t have a hard time determining whether you should buy its stock or not. For instance, if you are more into the technology industry and you have enough knowledge about it, it would be easier to compare two smartphone companies and decide which one you should invest in. But still, you need to do additional researches before buying up shares to further increase your chances of success.

4. Pick Companies with a Competitive Advantage

When it comes to buying individual stocks, you need to pick the right companies. Besides, it tends to be riskier than buying index funds or mutual shares, yet it can generate higher revenues. When looking for potential companies, you should look for some particular components that determine whether a specific company is successful or not.

Competitive advantage is one of these characteristics. It is basically a leg up over similar companies. The more sustainable competitive advantage of a particular company is, the more likely it is to keep growing and generating higher profits in the long term.

For instance, Amazon.com (NASDAQ: AMZN) is one of the most popular companies with a sustainable competitive advantage. Its cost-effective and strategic warehouse setup, as well as its essential relationships with couriers, are the key features that allowed the company to maximize profits and optimize efficiency. Even more, Amazon.com has its army of robots to facilitate the process of fast shipping.

5. Look for Companies with Solid Management

Having a strong management team is a key feature that determines the success and prosperity of the company. They are responsible for making critical decisions that will influence the companies’ values over time. So, it is highly recommended to find companies with excellent and reliable leadership teams. During your search for your next potential companies to invest in, make sure to check if the managers have a strong track record, specific talents, and ample experience.

6. Recognize Growth Avenues

You need to pick the right companies that provide the best growth opportunities if you are willing to invest in the long term. Growth investors are interested in companies that are anticipated to accelerate at a faster rate than their rivals, and that generate above-average profits. However, growth avenues can take different forms and shapes. So, when you are analyzing different companies, make sure to understand where they are going in the near and far future; not just how they are currently doing.

For instance, since its initial launch, Amazon.com has continuously branched out. It started as a web-based bookseller, and it has been evolving ever since. Now it sells all sorts of products, from apparel to groceries. So, it is easy to see how it may continue growing to dominate new corners of the market over the years.

Growth Investing

7. Tune in to Recent Conference Calls

If you want to learn more about the company of your interest, you should tune in to the earnings conference calls. Typically, companies perform conference calls quarterly, usually right after the release of financial information.

You will find valuable information about any particular companies during these conference calls: the latest financials discussed by the management, major factors that influenced the performance, and estimations for the next quarter or year. Besides, you will have a better understanding of how the company’s management copes with the different changes in the performance, for better or worse.

It is quite possible for a specific company to have high profits for one quarter and low profits the next. But still, the way the management handles these changes can have a big influence on the long-term viability and value of the company. Also, in most cases, you can find the conference call schedules on the company’s website, and everyone can listen to it online.

8. Determine the Value of the Stocks

As a stock investor, you need to figure out the value of your different stocks, and whether the trading price is fair. To have a better understanding of the different values of your stocks, there are simple formulas and tools you can use.

Typically, companies are valued based on their revenues and earnings per share (EPS) – which is the portion of the profit of a particular company allocated to each share of common stock.

Alternatively, you can use the price-earnings ratio (P/E ratio) to measure the value of any specific company. It measures the current share price of a company relative to its EPS. As a simple formula, it is calculated by dividing the stock price per share of a particular company by its EPS.

Generally, a company with a high P/E ratio is anticipated to have strong future growth. However, having a high P/E ratio doesn’t necessarily mean that the company is overvalued, and a low P/E ratio doesn’t necessarily mean that the company is undervalued. Besides, the P/E ratio is very helpful when comparing companies of the same industry.

9. Start Small and Diversify

With experience, you will be able to spot very rewarding stocks with high potential for great revenues. But still, every great stock comes with a certain risk level, generally higher risks than any other average-revenue stocks. That’s why you should never put all your money in one individual stock, even if it has 100% chance of success. I believe that you don’t want to lose all your money if anything unexpected happens. Even the highest companies face harsh times from time to time.

Additionally, once you have identified a great company with a potentially high revenue to invest in, it is best to start by purchasing a quite small position of its stock. That would undoubtedly minimize your risks of losing. Moreover, make sure to diversify your portfolio to increase your chances of success further while keeping a low-risk level. Besides, when buying stocks from different industries, you significantly lower the possibility of losing a considerable sum of money when a particular sector fails.

Beginner Investing

10. Keep Track of Your Investments

It is natural to keep track of your investments once you are done with buying your stocks. However, you shouldn’t keep checking them all the time, every day. That would turn you crazy and even lose your temper, especially when you don’t notice any significant changes from day to day.

As long as you are willing to invest in the long term, you don’t necessarily need to follow up on your investments very often and within short periods. Due to many factors, it is totally normal that a stock price fluctuates a lot.

With that being said, checking your investments once a month would be enough to see how they are doing. In addition, make sure to check up on the invested businesses and search for any potential red flags. For instance, if they are planning on changing the manager, and that doesn’t make you feel comfortable, you may want to pull out instead of taking your chances.  

How To Pick The Right Stocks

How to Pick the Right Stock – The Do’s and Don’ts

Picking the right stock is a crucial step when it comes to investing in the stock market. The stock you invest in will determine whether you are going to gain or lose money in the future. Sometimes, a stock might seem the perfect one at a particular moment, but it turns out to be a loser in the new few weeks or year. Alternatively, maybe you didn’t put high hopes and a lot of interest in a specific stock, but you end up regretting it when it turns out to be a winner stock.

The stock market has never been a game of luck and will never be. To make the best out of the stock market, you need to adopt an excellent investment strategy, which involves picking the right stock at the right time that will help you generate high profits in the future.
If you are a stock investor, or just getting started in the stock market and want to know how to pick the right stock, you can start with this guide. You will find all the dos and don’ts when choosing a stock.

How To Pick The Right Stocks Intro

What to Do When Choosing a Stock

Buy what you know

As a general rule, it is very beneficial to start with a company or industry you are familiar with, for many reasons. The more you know about a particular company or industry, the more your head is in the game. For instance, if you are in the medical field, you will more likely have a better idea which pharmaceutical companies are on top of the industry and how effective they are in terms of customer service and sales. Also, bear in mind that any nonpublic information you receive in an official capacity might be considered insider information. But still, any public information that is not widely spread can give you a significant advantage.

On the other hand, make sure to avoid the hype because you might end up losing money when these emerging companies turn out to be losers. Many investors fall into the trap of buying a stock that they don’t fully understand, and just because a particular industry went viral at that time, which might not last for long periods.

Consider price and valuation

Expert investors often look for individual stocks that are “undervalued” or “cheap.” This generally means that the different investors are paying a fairly low price for every dollar a company earns. It is measured by the price-to-earnings ratio (P/E) of a stock price. (it is the share price of a company divided by its net income). When comparing the P/E ratio results, a stock price is considered cheap when it is below 15 and expensive when it is above 20. But still, there is more to consider:

  • Expensive doesn’t necessarily mean bad, and cheap doesn’t necessarily mean good. Sometimes, the reason behind the low price of a stock is that the company is slowing down or growing less. Alternatively, a stock is expensive sometimes because it is predicted that the company is going to overgrow in the coming few years. So, if you want to buy a stock that will more likely be worth a lot later, look at the value combined with predictions for future earnings.
  • Know your stock. Generally, a company that is expected to grow significantly and rapidly in the near future will more likely be more expensive than an established company with a slower growth rate. Before locking your choice, make sure to compare the P/E ratio of a particular company with the P/E ratio its competitors of the same industry and check whether it is more expensive or cheaper than its peers.
How To Pick The Right Stocks Price

Analyze the financial health

It is essential to have an in-depth analysis of the financial reports of a particular company you are interested in. Besides, it is easy to find these reports since most of the public companies tend to release them quarterly and annually. Make sure to check the Investor Relations section in the company’s website, or look for official reports listed in the SEC online. To make your research even more efficient, don’t just focus on the most recent releases. Instead, put more emphasis on a solid track record with a consistent history of financial health and profitability, for long periods.

  • Look for revenue growth. Stock prices tend to significantly increase when companies are generating more money in the long term, which typically begins with growing revenue. Analysts usually refer to revenue as the “top line.”
  • Check profit margin. The profit margin of a company is the difference between its revenue and expenses. Generally, a company tends to expand its margins when it is growing revenue while successfully controlling costs.
  • Get to know how much debt the company has. To do so, make sure to check the balance sheet of the company. A company with more debt generally have a more volatile share price because more of its income has to go to the debt payments and interest. Also, check whether a company is borrowing an unusual amount of money from its group peers for its industry. That would positively affect its price share in the short and long-term. 
  • Find a dividend. A dividend is an amount of money paid regularly by a company to its shareholders, and it is a sign that a company is in an excellent financial health. Make sure to look at the history of their dividend payments, whether they are increasing or not.
How To Pick The Right Stocks Financial Health

What NOT to Do When Choosing a Stock:

  • Don’t rely on price alone. Just because the price of a stock has dipped 10%, doesn’t mean that it is a bargain and you should buy it right away. It is very important to know the reasons behind its fallout and have a better understanding it is going to rebound.
  • Don’t count a lot on analyst recommendations. It is always a good idea to listen to the experts’ advice. They can provide you with valuable information about the health of the business. However, be cautious that they tend to favor ‘buy’ ratings. That is why a sell rating, especially a new one, might be a red flag from an analyst perspective. You should always keep an open eye on those calls
  • Don’t neglect the stocks’ volatility. Compared to a diversified mutual fund, an individual stock tends to be more volatile. So, make sure to check the stock’ highs and low within every week of the year to have a better idea of how the prices swing all year round.
  • Don’t forget to sell. You should always have a solid strategy when investing in stocks. You need to know when to buy a particular stock as well as when to sell it. To do so, make sure to set some criteria to know when is the right time to sell that stock: if the price goes high or down to a certain point if the particular company cuts its dividend, if an analyst depreciates the stock, etc. This will undoubtedly help you better manage your stocks and avoid rushing to selling over a short-term fluctuation in the market. When following these criteria, you increase your chances of success and minimize the risk of losing your stocks during unexpected events.    
Largest IPOs

Top 10 of the World’s Largest IPOs of all Time

IPOs of large companies are usually a good opportunity for investors to position themselves early in a high-growth company. If the circumstances are right, there is no better choice than the IPO to create new millionaires overnight.

Largest IPOs Big Company

An initial public offering (IPO) is when a company goes public starts to sell its shares in the open market for the first time. An initial public offering is one of the few times a company will sell its shares. After the shares are initially issued, they are traded among investors in the secondary market, which is called the stock exchange. An IPO’s main purpose is to raise capital for the shares issued by the company.

In this article, we’ll talk about the top 10 of the world’s largest IPOs. There are several different companies on the list, including four financial services providers, two telecommunication companies, two Internet-based “new technology” companies, an energy provider and an automobile manufacturer. Asia dominates the list: 3 Chinese companies hold the first three largest IPOs of all time.

1. Alibaba Group Holding Ltd. ($25 billion)

Alibaba Group Holding Ltd. (NYSE: BABA), based in Hangzhou, holds the title of the first-largest IPO of all time. This e-commerce giant was unknown outside China by the time it became public on September 18, 2014. When Jack Ma, the founder of Alibaba, failed to reach an agreement with the stock exchange of Hong Kong, he took the company’s initial public offering over New York. Alibaba initially placed 368.1 million shares at 68 US dollars with investors, initially raising $21.77 billion.

Then, right after four days, underwriters exercised the so-called “greenshoe” option to bring more shares on the market, which allowed the company to increase its IPO to up to $25 billion. Alibaba Group chose to list on the NYSE for its launch rather NASDAQ, and the Credit Suisse underwritten its IPO. The group owns large e-commerce brands such as Alibaba.com, Aliexpress.com, Taobao.com, and Tmall.com.

2. Agricultural Bank of China Ltd. ($22.1 billion)

A Chinese company as well holds the title of the second-largest IPO. AgBank became public on July 7, 2010, at a whopping $19.2 billion. Then, it had increased its IPO to reach up to $22.1 billion. In addition, Agricultural Bank of China Ltd. is a part of the “Big Four” banks in China.

Largest IPOs Agricultural Bank of China Ltd

3. Industrial and Commercial Bank of China ($21.9 billion)

ICBC is one of the “Big Four” as well and holds the title of the third-largest IPO of all time. It became public on October 20, 2006, raising $19.1 billion. A year later, the Chinese bank succeeded in increasing the IPO to $21.9 billion due to an over allotment option.

4. General Motors Company ($20.1 billion)

General Motors is a multinational automobile manufacturer. It was affected by the global financial crisis in 2008 during the company’s 100th anniversary. The US federal government, which intervened with $50 billion, saved the company. The American automobile giant November 16,2010 after recovering from bankruptcy. Only one year and a half later, GM succeeded in generating an IPO with a total of $20.1 billion; one of the fastest and most successful company profits in history. At present, GM owns Buick, Cadillac, GMC, and Chevrolet.

5. NTT DOCOMO Inc. ($18.4 billion)

Japan’s largest mobile communications group, NTT DOCOMO, went public in 1998 and generated revenues of USD £18.4 billion. Headquartered in Tokyo, the company is a subsidiary of Nippon Telegraph and Telephone Corporation (NTT) and serves more than 62 million mobile customers. This giant Japanese communication company was underwritten by Golden Sachs Asia. Also, it had been on the NYSE list until April 13, 2018, when it officially delisted its American Depositary Shares (ADS).

6. Visa Inc. ($17.9 billion)

In March 2008, the US credit and debit card provider Visa (NYSE: V) ventured into the stock market. The company placed 406 million shares at $44 with investors and private investors, initially raising almost $17.9 billion. Later, further 40.6 million shares were issued, bringing Visa’s total revenues to $19.7 billion with a 219% return after the first year. Today Visa has an annual turnover of more than US $12 billion, and the Visa share price is well over the $200.

Largest IPOs Visa

7. American International Assurance Group Ltd. ($17.8 billion)

Asian AIG’s subsidiary, American International Assurance (OTC: AAIGF) went public in Hong Kong on October 21, 2010. AIA raised more than $17.8 billion making it the largest publicly, independently pan-Asian group of life insurance to be listed.

8. Enel S.p.A ($17.4 billion)

The Italian energy supplier Enel S.p.A (OTC: ENLAY) became public on November 1, 1999, and raised roughly $17.4 billion. In 2010, the green power subsidiary Enel Green Power (EGP) went public, raising $3.8 billion. Enel has 72 million end users worldwide and works in 34 countries. This Italian firm competes in the electric and gas market in the whole Europe, North America, as well as in South America.

9.  Facebook ($16 billion)

In May 2012, Facebook made the history: With an IPO volume of $16 billion, it was the largest IPO of an Internet company at that time. The shares were placed at $38, but the euphoria quickly faded. Its debut was riddled with questionable accusations of sharing information and trading issues. Investors who had subscribed sat on losses of up to 50% in the first few months. Only then, Facebook succeeded in monetizing its mobile users more effectively, and the Facebook share recovered again. As of April 2019, Facebook has 1.56 billion daily active users on average.

10. Deutsche Telekom AG ($13 billion)

Deutsche Telekom AG went public on November 17, 1996, raising over $13 billion, but the price quickly plunged in a straight line after it was issued. At the time, investors were worried about their heavy burden of debt, but Deutsche Telekom AG soon continued. Today, 68% are owned by public investors, and the state of Germany holds an additional 32% of the property. This German communications company owns T-Systems and T-Mobile. It is estimated that it has more than 156 million mobile customers with 29 million fixed lines of network.

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