In UK stock market, investors tend to trade in such dividend paying stocks who have consistent dividend growth and a long dividend history of paying out dividends to their shareholders. In-short, people prefer to trade among reliable stocks that can provide them an healthy dividend amount.reliable companies always earn a pretty consistent amount as profit. Reliable dividend is a relative terms rather than being an absolute term because you can’t say surely that dividend from a reliable company won’t be cut or suspended.
During the financial crisis many of the safe companies that were thought to be safe (bank) turned out suddenly so unsafe as many of them suspended or cut their dividend payments from shareholders.
First Thing Which one should look for is the unbroken record of dividend payments in the past.see a unbroken record of dividend payments over at least a decade may be a high benchmark for many companies but it’s necessary to look for also.
If you have got a company who missed the dividend payout for a single year then it should not be added to a high yield, low risk portfolio. Dividend investing is much like value investing and it’s not all about trading from one company to another, selling a stock and buying another stocks with which you are comparatively less familiar just to earn dividend in the next 10 minutes.It should be adopted as a long term strategy to earn profit each year and to multiply that profit by a constant factor year by year you should have a proof that company can give you dividends for the each year of next 10 years and it is 100% possible when company has done this in past.
For Passive investors, growth in earnings and dividends is not that much big deal because it’s always advised to dividend investors to look into FTSE Top indices like ftse 100, ftse 250 and ftse 350 for all kind of dividend possibilities. Usually, an investor who invests in Ftse 100 dividend paying stocks, usually gets dividend yield of 2-3% on an average. However, it is also notable here that looking into ftse stocks can be also problematic as we all are aware of the fact that mostly companies in ftse indices are well established and hence they can’t give you a sudden dividend hike of 5% from 2%.
Such companies have got their position already so the chances of growing business and profit becomes less and lesser as company moves along the ftse charts. Instead of this a smaller company operating in Mid cap region in LSE can give you much hike in your income as it has all sides open to expand it’s business and there is no nearby expansion limit, beyond which company can not grow. So it’s always a great idea to look Ftse stock indices for choosing reliable, constant dividend growth giving dividend stocks while you can choose mid-cap stocks for getting high dividend yield returns. If you have 15 place in your stock portfolio. You should have 7-8 stocks from reliable dividend payout category as without these, life can be problematic sometimes 4-5 stocks should be from high dividend yield category(from mid-cap region).
Another Important tactic can be looking into 52 week Hi/low data as I feels range should be as small as possible as a small gap between 52 week high and low values clearly indicates that stock price is not much fluctuating and this one is a good sign as it will save you from buying overvalued stocks from the FTSE stock market.
Resource: Get dividend data for all the FTSE 100, FTSE 350 and other stocks listed in LSE. Get Dividend Data like important dividend dates (Ex-dividend date, Record date, Payment date, Announcement date) Dividend Yield, Yield%, 52 week High/Low rankings, dividend growth rate, dividend history, etc by Dividend Investor UK. With our Tracker Tool you can track your favourite UK dividend stocks which fit into your custom criteria. Also, you can screen from thousands of best dividend paying stocks in London stocks Market from Screener Tool. Get email alert for any new dividend announcements from FTSE Dividend Stocks like new dividend announcements, payout increments, change in Yield%, Ex-dividend alert etc via our ealert Tool.