Dividends4Life: Finding the Top Blue Chip Dividend Stocks

Finding the Top Blue Chip Dividend Stocks

Posted by D4L | Tuesday, March 29, 2011 | | 0 comments »

Although blue chip stocks usually share certain quantifications such as large market capitalization and dividend payouts, much of their status is derived from high qualifications which are slightly more intangible. Scanning for such companies based on a few simple numerical guidelines may not yield the desired list of blue chip stocks. Instead, try looking for them in an index. An index is simply a basket of stocks with a commonality, merged, and displayed as one large combined price. An index could represent an entire exchange, a selection of small growth stocks, or income-generating blue chip stocks.

Some indexes, such as the S&P 500 Dividend Aristocrats, call for a long history of increasing dividends. While this criteria is a good start, you will need to make sure that the yields are also stable. For instance, a company may trade at $100 and the dividend payout is $10 per share. 25 years later the share price is $500 and the dividend payout is $25. While the total payout has increased, the yield has dropped in half.

Source: Money Crashers

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