Asset module
Dividend Stocks & ETFs
Yield, payout, aristocrats, DRIP.
Key lessons
- ◆Dividend yield = annual dividend ÷ share price.
- ◆Payout ratio = dividends ÷ earnings.
- ◆Dividend Aristocrats: S&P 500 companies with 25+ years of increases; Kings: 50+ years.
- ◆You must own shares before the ex-dividend date to get the payment.
- ◆DRIP reinvests dividends into more shares.
- ◆REITs must distribute most taxable income.
Risks
- • A high yield is not automatically safe or sustainable.
- • Dividends can be cut or suspended.
Never treat a high dividend yield as automatically safe.