The Right Company For Investment: How To Choose It

Everyone wants to earn money for living. Soon or later we have to decide where to invest some amount of money to get profit. A good way of investing is to choose a company that pay dividends or dividend investing. But how to select companies that pay dividends?

When selecting companies with established income, it is necessary to pay special attention to the history of dividend payments. These findings are in numerous references and computer databases. Long-term and continuous payment of dividends is usually associated with high stability of the company, its ability to accumulate cash. Published profits of the company are not very reliable, sometimes they are underestimated to reduce the payment of taxes. Dividends are real money, forever leaving the company. If a company can give money to shareholders, then it should have reserves and to expand production, to create new industries, to invest in prospective studies. Many financial institutions do not even consider as candidates for investment such companies that do not pay dividends. Statistics show that the shares of companies with a good history of dividend payment less fall in value when market falls.

Especially attractive for investment companies, those do not reduce dividends payments during a recession. In the book of well known analyst Frank Cappiello, are shown the results of surveys of corporate executives. They suggest that boards of companies with special attention decide whether to change the payment of dividends. The company’s management is committed to at least a little, but to increase dividends. Lowering the dividend is always considered as a last resort, because everyone understands that it would alienate investors with all the ensuing consequences for the company. Stable small dividend payments may mean that the company, using the last efforts tries to save face, and investing in such companies should be conducted only after careful analysis of its financial condition.

Dividends may be paid in various forms. The most common is a cash payment. Example suppose you are the owner of 100 shares of a top brand at NYSE (KO). The company has achieved excellent results this year and agreed to pay a dividend of 0.28 per share. This means that on your brokerage account will be transferred 28 ( 0.28 x 100). In practice, companies that pay dividends, make payments usually four times a year.

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