Choosing the right stocks at the right time is very important for success in the stock market. Dividends paid by companies help investors to increase their earnings from the market. In this article, you will find the best dividend stocks for 2012, presented before you.
There are thousands of companies operating in diverse sectors listed on stock exchanges. Any person with even a little sense will understand that all these companies are definitely not worth investing in. One needs to understand the business model of the company, forecast its growth and sales, look at its debt position and profitability, before investing in its stock. Another point which should be taken into consideration, is the dividend paying history of a company. Investors can also take help from stock analysts to know about the stocks that pay dividends. So before we understand which can be the best dividend stocks, let us get acquainted with some basic facts about dividends.
Important Facts About Dividends
Not all companies pay dividends to their stock holders. Here are some important points of consideration about dividend payments:
- Dividends are paid to shareholders of the company, from the net profit earned by the company
- The company has to allocate an amount for transfer to reserves and depreciation, before giving out dividends
- Dividends are given on a per share basis to the shareholders. So, more the holding of a person in a company, more would be the dividend amount received by him.
- The board of directors decides the dividend to be paid to the shareholders, on a per share basis
- Different companies have different dividend paying policies. Some companies have a generous dividend payout strategy, while others have a restrictive policy.
- Some companies like Berkshire Hathaway prefer to keep more cash with them, instead of paying hefty dividends to their shareholders. These are nothing but the retained earnings, which are used for business expansion purposes.
- Dividends paid by top-notch companies of every sector are better and consistent than those paid by the smaller companies.
- During the dividend payout, fixed dividends are paid to the preferred shareholders and they are given top priority in dividend payments, over the ordinary shareholders.
If you study the list of best dividend stocks to buy, you will notice that most stocks are from the information technology, retail, technology, consumer durable and consumable products sector. Pharmaceutical companies and oil companies also pay attractive dividends. These sectors are more profitable than the rest and hence the companies have been able to maintain their dividend payment rate.
Stocks Paying High Dividends
The table provided below lists the top dividend stocks for 2012, that can provide a steady cash flow for shareholders. These stocks have been chosen due to their past performance, solid financial fundamentals and a good future financial forecast, after thorough research.
|Sector Wise Companies|
|Banking, Investment and Financial Services||T. Rowe Price Group, Inc., Franklin Resources Inc., Cincinnati Financial Corporation, JPMorgan Chase, General Electric Company, Great Northern Iron Ore Properties, BlackRock, Inc.|
|Basic Materials||Sigma-Aldrich Corporation, DuPont, Terra Nitrogen Company|
|Capital Goods||Illinois Tool Works Inc., Lockheed Martin Corporation, The Boeing Company|
|Consumer Products & Consumables||Procter & Gamble, Johnson & Johnson, PepsiCo Inc., Philip Morris International Inc., Colgate-Palmolive Company, McDonald’s Corp., Kimberly Clark Corp, Leggett & Platt, Inc., Kraft Foods Inc., Hasbro Inc.|
|Information Technology||Automatic Data Processing Inc., Microsoft Corporation|
|Technology||International Business Machines Corporation, Intel Corporation, Emerson Electric Co., Seagate Technology PLC|
|Medical Technology, Healthcare, Pharmaceuticals||Medtronic, Inc., Becton, Dickinson and Co., Pfizer, Merck, Bristol Myers Squibb Co.|
|Oil and Gas||Exxon Mobil Corporation, Chevron, ConocoPhillips, PetroChina Company Limited|
|Publishing and Printing||The McGraw-Hill Companies Inc.|
|Telecommunications||AT&T Inc., Vodafone, Verizon Communications Inc.|
|Real Estate Operations||HCP Inc., Alexander’s Inc., American Capital Agency Corp.|
|Retail||Sysco Corporation, Wal-Mart Stores, Walgreen Company, Target Corporation, Family Dollar Stores, Inc.|
|Services||Waste Management Inc.|
|Steel and Engineering||Genuine Parts Company (GPC), W.W. Grainger, Inc., Dover Corporation|
These were some of the high dividend stocks 2012 that would be extremely profitable for you. These stocks can fulfill your regular liquidity requirements and help you have strong cash inflow. So, pick the right stocks and enjoy the benefits. All the best!
DISCLAIMER: This article is just for reference purposes and does not recommend any stock market transactions.