NEW YORK ( TheStreet) -- Who doesn't enjoy receiving statements with dividend income every month? I know I look forward to collecting dividends with capturing strategies or with longer-term holds.
If collecting big dividends was as easy as buying the highest-yielding stocks we would all be rich and holding a drink in our hand on the beach (not to mention how crowded the beach would be).
Fortunately, there are methods to filter out many of the dogs with fleas, and zero in on the Best in Show.
I start by examining stocks I already either trade or follow and have a large dividend. I add in a screen for large-yield stocks and add the ones that meet the following criteria:
A stock must be highly liquid, and trade with a small bid-ask spread to avoid slippage
The company must have a history of dividend payments and increases in payments
The company needs to demonstrate the ability to continue paying the current dividend or more
The stock chart must be in a bullish uptrend; there is no point in looking for an oversized yield if the shares are expected to drop as much or more in the next year
Shareholders receive $1.42 annually in dividend payments. Over the last five years, the dividend has grown by an average of 9.1% per year, almost as fast as the garbage piles up in my son's room. Shares are slowly but steadily climbing in the last 30 days. Shares are now 2.5% higher than last month. Based on technical analyst the chart is breaking out of recent resistance and appears ready to test the next level of resistance near $36. The moving averages are either moving higher or rounding higher.
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts