About High Dividend Stocks

By Gilbert Stockton

There are different kinds of investors who invest in the stock market; some look for easy and quick money while others look for great inflow from high dividend stocks.

Price to earnings ratio or PE is used to determine stock growth. A stock with a high PE and smaller earnings has more growth potential. Investors want more than 10% return from these types of stocks.

Do determine the PE of a stock. All you have to do is take the share price and divide it by the earnings of every share. This result will be the PE.

The stock market is very unpredictable but many investors say that the PE should stay with the stocks growth. For example if a stock traded at $10.00 and then reaches $12.50 then the growth is 25%. The PE should also be 25% then.

The PE ratio follows the stock rice. If the stock goes down so will the PE ratio. Many investors look for a good PE ratio what that pays good dividends to decrease the variance in the price and return.

If you purchase a stock with good dividends then you need not wait for an increase in the stock prices to gain profits. Even if your stocks stand still, the inflow of dividends will give you good ROI (return of investment). This is especially in the cases where the yield is more than 5%.

There are stocks with dividends of higher than 10% but you need to watch theses stocks because of dividend cuts in the future. Predictions and past experiences can cause dividend cuts. - 23196

About the Author:

Read about how you can use Penny Stock Tips to earn thousands of dollars. Trading Penny Stocks is the fastest way to make tons of money.