Above is my list of the top 10 Income Securities to consider purchasing for income investing. To date, I do not have any of these securities in my portfolio. It is not because I don’t like them. It is because my favorite securities of choice are Corporate Bonds.
By the way, another way you can see my blogs is on my Face book. If you want, place in your Google Search “Face book Darnell Williams bond investments” and look for my blog, “10 Income Stocks for Your IRA Portfolio.”
Now you are ready to learn how to evaluate these stocks, REITS, and Close End Funds. You can find more of these securities by contacting your brokerage firm and asking for a list of income securities. Most can send you information similar to what you see in my blog or face book. The information that I am telling you about can be listed on an EXCEL Spreadsheet. You can sort the data by “Yield Percentage” and “Payout Ratio.” Since I do not believe in “stock marriage” or falling in love with stocks, I would buy the top yielding stocks with the lowest Payout Ratio. I would sell them when needed.
Let’s talk about the columns on this report. “No.” is the ranking that the analyst (you) give it. “Company Name” is the name of the company giving the dividend. “Computer Symbol” is the code that you can type into your computer and get “up to date” information on the company and its securities such as current price, earnings and yield. For this blog we will take a look at Universal Insurance Holdings with the computer symbol “UVE” in the above example.
“Frequency of Dividends” means how often the security will give a dividend. Some companies give dividends monthly, some quarterly, yet others give dividends yearly. Investments that give a monthly dividend can give you a higher compounding rate when reinvested.
The price of the stock or security (above) is the price of the security when I did the research on these companies. The “Annual Dividend” is the amount of cash given to the investor or speculator per share per year.
“Has a Preferred” means that this security has preferred stock traded publicly that you can purchase. I did not place the company’s preferred stock on my list.
Look at Universal Insurance Holdings. “Yield Percentage” is given to (you) the researcher by following this equation. Yield = Annual Dividend / Stock Price. For example; 8% Yield = 40 cents / $4.68 stock price. I strongly consider this when looking to buy a security.
“Payout Ratio” is how much of the company’s earnings will be paid out to investors and speculators. The equation is as follows; Payout Ratio = Annual earnings per share / Annual Dividend. For example; 57.97% Payout Ratio = $1.45 Annual Earnings/ 40 cents Annual Dividend. Some people take present earnings, others take next year’s projected earnings to come out with this figure. If you want a stock that appreciates then the company should have money to spend on future activities. In that case, the Payout Ratio should be no more than 80%. The lower the Payout, the better for you. If dividends are all you care about then this figure should be no more than 95%.
The objective is to make money for you and your family, not for others. I only use a few ratios like the ones above when looking at securities. These are some of the few. My oldest daughter is going for her MBA. She just finished one of her finance courses. She wanted me to look at some calculations that her class taught her to determine what stocks will go up or down. I told her that her paper was fine.
Then I told her that once her class is over, forget that “crap.” If that stuff worked then all these banks and investment houses would not have gone under nor needed bailout money in the past 3 years. This depression is the test that proves that none of this MBA Investment Crap invented by investment firms to “rasal dasal” the public works! By the way, she got an “A” on her paper.
Who is looking at Darnell’s blog?
I want to welcome Singapore to our blog. The top 10 ranking from more read nation to the least is; 1) United States, 2) South Korea, 3) Canada, 4) Ukraine, 5) Russia, Tied for 6 is Chile and Hungary, 8) China, 9) Denmark, 10) Bulgaria.
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