Dividend Yield Investing

I view dividend investing as an important part of long term investing strategy other than investing for capital appreciation.

When I first embarked in my journey of investment, I was all focused in getting into the right (hot) stocks which the market might chase after or situational stocks which punters might have rotational plays. This type of investing or rather, speculative approach, has been a very expensive lesson for me.

As I began to take count of my investment gain & loss, I realised that investing for capital appreciation is not predictable even though you may have put in a lot of studies on the business fundamentals. Even if you rightly predictable (or guessed?) the profitabilty of the business, the market may still continue to ignore the stock and you may never achieve the level of returns that you wanted.

However, looking for companies with attractive dividend yields may be an easier exercise than finding the next hot stock. In screening for dividend yield investee, the key question is substanabilty of the current dividend payout. On the topic of substanability, one has to look closely at the operating cashflow and the capex requirement.

Why does a company pays high dividend? Dividend yield makes up of two components; (1)dividend amount, (2) stock price. Hence, a high dividend yield stock can only be either paying a high dividend amount at reasonable stock price or reasonable amount of dividend at low stock price. Therefore, one has to examine these two components of a stock in order to make a better investment decision.

In Singapore context, the stocks that are generally paying historically high are in the transportation, shipping, hotel, property developers and 'public goods' providers.

Transportation stocks
Examples of listed transport company are ComfortDelgro, SBS and SMRT.


How?
Criteria?
when should take profit?
e.g. REITs
when is best time to invest?
Warren buffet on investment
why my choice for dividend
growth vs dividend
fixed dividend vs growing dividend e.g. DBS pref & OCBC
reinvesting dividend, my strategy
type of industry e.g. transport, shipping, REITs,
consistency of paying div, special vs regular dividend, management ownship, cashflow management, capex, share buyback vs dividend