Dividend stocks

novice dividend investor looking to further diversify his portfolio here. i was wondering if anyone browsing Veeky Forums has any dividend stocks they'd recommend

Other urls found in this thread:

investopedia.com/articles/02/011602.asp
cboe.com/framed/pdfframed?content=/micro/buywrite/pap-assetconsultinggroup-cboe-feb2012.pdf§ion=SECT_MINI_SITE&title=An Analysis of Index Option Writing for Liquid Enhanced Risk-Adjusted Returns
discord.gg/ZxrzK
investopedia.com/articles/stocks/06/peterlynch.asp
suredividend.com/11-reasons-to-be-a-dividend-growth-investor/
nuveen.com/Home/Documents/Default.aspx?fileId=49963).
irs.gov/pub/irs-pdf/i1040gi.pdf
moneychimp.com/features/capgain.htm
twitter.com/AnonBabble

STON, GILD, APPL.

TLC

LTC** rather

Not the coin, the property company

>2017
>still having to pull this from the archive every week

OUTSIDE a tax-advantaged account, a dividend stock will lose out to a growth stock over time because the dividends are taxable as long-term capital gains. This eats into your investment capital, and saps your compounding.

Consider two equivalent stocks -- a growth stock (Stock G) and a high-dividend stock (Stock D) -- both of which yield 10% per year. Stock G earns its 10% by price accumulation alone, and Stock D earns its 10% by paying a 10% cash dividend. You own 1 share of each, and they are both worth $100/share. At the start, therefore, both Stock G and Stock D are worth $100.

At the end of 1 year, Stock G is now worth $110 (10% growth), and Stock D is still worth $100 but has paid you a $10 dividend which you re-invest. Your return on both stocks is the same -- before taxes. After taxes, however, Stock G is still worth $110 (no tax consequences) but Stock D has only returned you $108 because you paid 20% in capital gains taxes on the dividends. (I'm using 20% to keep the math simple in this example, but the principle is the same for any tax rate.) So after one year, Stock G is ahead by $2.

After year two, Stock G is now worth $121 ($110 x 10%), and stock D is worth $108 ($100 original + $8 reinvested) but has paid you a $10.80 dividend, reduced by taxes to $8.64, for a total gain of $116.64. Stock G is now ahead by $4.36

Hopefully you can now see where this is going. Every year the spread between Stock G and Stock D is going to get wider and wider because taxes aren't depleting any of your Stock G capital.

INSIDE a tax-advantaged account, you don't suffer the tax hit when dividends are declared. You get to reinvest the full amount. Therefore, inside a tax-advantaged account, growth and distributions both add EQUALLY to your growth and your compounding. So what you should be focused on is maximizing your overall return (growth PLUS dividends) instead of focusing on one or the other.

thanks

SSW.

That's why with dividend stocks you make sure to do them in a DRIP plan, and preferably an IRA DRIP. You don't pay taxes on those "dividends" reinvested into the stock until/if you sell the stock.

investopedia.com/articles/02/011602.asp

lrn2read. the post specifically addresses this.

also
>stock pays dividend for 2% 20 years (it's usually higher, and a increasing slope)
>"growth stock" doesn't continue doing "growth" past ten years or certain revenue/market pool because that's how the law of growth and customer bases works

If stock a pays a dividend for 50 years it's inherently worth more than le growth company that spudders out after ten years and has no balance sheet to pay investors or facilitate acquisitions. if you don't have enough money to even pay your shareholders, then you actually have no intrinsic worth in my opinion.
>muh dividends aren't good use of company money!! :^((

find me successful corporations that have existed for 50 years that don't pay a dividend.

Kill yourself man.

Nothing worse than a retarded faggot who recommends people don't buy dividend stocks because le dividend tax sky is falling! then be unable to show this in practice because it's not real life and can't be applied in real life.

Find me a corporation that has existed for 50 years and has paid more than PG, BA, MM, or any other major corporation with sustainably increased dividends.

Its a hypothetical example for teaching purposes. If you change the facts to make one stock inherently better, of course that stock is better.

I think this is all going over your head.

>then be unable to show this in practice because it's not real life and can't be applied in real life
Oh really? Dividends aren't taxed in real life?

Yeah, definitely going way over your head.

Find me a stock that pays more in sustained stock price growth that outpaces the growth of MMM over the last 50 years with dividends included. Remember, you can't pick a stock that pays a dividend.

I'll wait. You'll be looking a while faggot-senpai.

inb4
>well I can't find any because muh survivorship bias

gee, it's almost as if those unicorn "growth companies" that never paid a dividend out went out of business eventually and the companies that transitioned into transferring wealth to shareholders in a real way were able to stay relevant, huh?

Again, you're missing the point (this seems to be a theme with you). In the real world, many solid performing stocks do so through both dividend payouts and price accretion. There are very few stocks in the real world that mimic either Stock G or Stock D in the teaching example.

I guess some people have brains too small to grasp the concept of an example. Try not to take everything so literal, kid.

>p.s. In all your posts you still haven't explained why you think the example is wrong.

Gonna go to bed while you look for that unicorn "growth company" that never paid a dividend yet also managed to produce more "real" gains for an investor than MMM, DIS, PG or any other benchmark dividend stock.
>muh hypothetical is based on bullshit conjecture and I keep acting like it's credible b-but ur just dumb

Find me your unicorn growth company that out-gained any stock that has paid a dividend since the point you choose. You'll need to keep your timeframe of atleast 20 years to give the dividend a chance to compound, though, and you'll find your little bullshit misleading article is founded on sand.

Thanks for playing retard.

Yeah, just as I thought. You still don't get it.

Enjoy your tax impaired, suboptimal gains. I guess the good news is that you're too stupid to even understand your own mistakes.

>>p.s. In all your posts you still haven't explained why you think the example is wrong.

Because you can't cite a non-dividend paying stock that out gained any benchmark dividend stock.

Enjoy talking to yourself about how your unicorn stock magically became profitable longer-term than a sustainable dividend stock, cuck mcgee.

>he's such a stupid fuck he can't even prove his claim that hurrdurr muh dividend is badddd muh growth stock is goodddd before he backtracked and resorted to ad hominems to attempt to pretend he isn't spouting bullshit theory that doesn't actually work in real life

Man, you must be really stupid or a faggot.

>Because you can't cite a non-dividend paying stock that out gained any benchmark dividend stock.
ORLY?

#btfo
#rekt
#goodnightsally

>p.s. GOOG not exactly a "unicorn" stock. It's a real company last time I checked.

That's pre-tax, btw. Post-tax the dividend "benchmarks" you taut do even worse.

Moron.

wow, you mean google went up 220% in 4 years?

how's moving those goalposts when I specifcally already cut you off about this cuntboy?
>Find me your unicorn growth company that out-gained any stock that has paid a dividend since the point you choose. You'll need to keep your timeframe of atleast 20 years to give the dividend a chance to compound, though, and you'll find your little bullshit misleading article is founded on sand.


I guess when you suck dick for a living and are riddled with AIDs you expect your life to last about 20-30 years, but for real people making money, timeframes like 30 years are reasonable to put your money in and watch it be worth more than your life.

>4 years
>10 year chart

#btfo
#rekt
#goodnightsally

>he's still pretending when he specifically is moving the goalposts and narrowing the timeframe just to skew the results so he looks "correct"

You mean a short term spike outpaced a sustained quarterly dividend?

Wow, you sure showed me.

>Find me your unicorn growth company that out-gained any stock that has paid a dividend since the point you choose. You'll need to keep your timeframe of atleast 20 years to give the dividend a chance to compound, though, and you'll find your little bullshit misleading article is founded on sand.

Let's see google's 10 year returns vs the s&p, kiddo.

>a short term spike
>10 year chart

#btfo
#rekt
#goodnightsally

Go ahead and move that back and compare it a bit closer and you'll realize how stupid you are. I'm amazed that you're not trolling. But, that's Veeky Forums.

>PG still outpaced GOOG

you showed me man.

>Let's see google's 10 year returns vs the s&p, kiddo.

#btfo
#rekt
#goodnightsally

>PG still outpaced GOOG
PG didn't even outpace the S&P 500.

#btfo
#rekt
#goodnightsally

>you showed me man.
I could do this all night.

>you can't cite a non-dividend paying stock that out gained any benchmark dividend stock.

ORLY?

(You)
(You)
(You)
(You)
(You)
(You)

Show me on the doll where the facts hurt you, user.

Or....

Wild fucking thought here guys....

You're diversified across both growth and dividend stocks????

Fuck. ECON1001

>You're diversified across both growth and dividend stocks????
1. You have to distinguish between "dividend stocks" and stocks that happen to pay a dividend. When people taut dividend stocks they're talking about stocks that pay higher-than-average dividends compared to the market average (about 2% yield). Having stocks that pay average dividends is indeed fine, and indeed largely unavoidable for anyone who is broadly diversified. However, what we're talking about are the people who focus or overweight into high dividend yield stocks, and that's where the problems arise.

2. Even with high dividend yield stocks, the tax problem is ameliorated with the use of a tax advantaged account, allowing you to diversify your holdings with suffering the tax drag. I already said this four hours ago in .

So thanks for your elementary level post, and for not actually reading the thread before posting. +1 participation points and a trophy for you.

I thank you for your participation trophy

But seriously, the difference between dividend stocks and growth stocks in many respects is where you personally draw this line.
Im australian so my examples will be based on the ASX.
Telstra: 15c/share for the last 5 years. Divided stock
SCG: variable if any divided, 12% price growth upwards last 12 months. Growth stock
What about woodside? Growth 8%, pays excellent divided. Growth or divided...


My point... you cock smoking faggot. Is that the best strategy to minimize risk and increase profit, is to be diversified across many types of stocks.

And yes, you are correct. That is fucking 101 economics.

>Im australian
Apology accepted. I'll try to explain this more simply, now that I know.

A "dividend stock" (oe more accurately, a "high dividend stock") is one that pays a dividend yield substantially higher than the market average. In America where were have real financial markets, the average dividend yield is approximately 2%. A high-ish dividend stock would be something at least 50% higher than the market average.

In addition, we traditionally include what are called "dividend aristocrats" which are stocks that either have a historically stronger-than-average track record of payout consistency, or stocks that have a sustained track record of increasing dividend payouts.

So, now that you know the commonly-used definitions, could you kindly shut the fuck up and allow the grown-ups to talk? Thanks mate.

Verizon, Kimberly-Clark, and Clorox are pretty good, too. It's actually pretty nice continuously selling covered calls on dividend stocks to 'supercharge' your annual returns. Granted, it has you enter and exit more frequently than otherwise but 12-18%+ a year is great none the less.

Also, why do these threads always devolve into a shitshow of hogwash theories and and salty anti-dividend faggots?

>Also, why do these threads always devolve
Um, maybe because the dividend fags are blind to the real flaws of their strategy, use made up numbers, exaggerate their returns, and run when confronted with actual facts.

Or maybe your kind just tend to be whiny faggots.

I haven't the foggiest idea what you're rambling about. Dividends and calls (and I guess put sales) have highly reliable returns. Going for 'growth' and what-have-you, on any quantitative basis, is predicated on, "The past is indicative of future results."

>I haven't the foggiest idea
Yes, this is painfully obvious.

>Dividends ... have highly reliable returns.
Dividends don't have returns. And if you mean dividend stocks, then your statement is mostly incorrect. Go look up high dividend REITs and oil & gas trusts and tell if those look reliable to you.

>calls (and I guess put sales) have highly reliable returns
Yes, but they underperform the market as a whole. Go look at the Covered Call or the Buy/Write Indexes.

>Going for 'growth' and what-have-you, on any quantitative basis, is predicated on, "The past is indicative of future results."
Same for dividends, junior. Or did you think you had a contractual entitlement to those payments. You don't. If you did, it would be called .... (do you know the answer?) ... a bond.

Dumbass.

Your desperation is palpable, so much so that you use a strawman (actually, multiple) to refute.

>Go look at the Covered Call or the Buy/Write Indexes.
As it happens, numerous call/put sale indexes made by the CBOE outperform the S&P. Anyway, it's been shown that investors are better off selling puts and calls on their own rather than buying an index or fund which is supposed to do the same.

>Same for dividends
Oh, heavens no. I can, with a superbly high degree of accuracy, determine how much AT&T (for example) will pay out to investors in dividends in a given year -- far more accurately than anyone on the planet can guess how much the price of any given stock may go up (or down). Moreover, I can concretely determine how much I am to make if I sell a call on a stock I own -- down to the exact penny, even. Coupled together, I can quantify how much I am to make when I sell a call on AT&T and, with a high degree of predictability and accuracy, determine how much in dividends I am to be paid on top of it.

>numerous call/put sale indexes made by the CBOE outperform the S&P.
Actually they don't, not over any meaningful period of time. Thanks for playing, chuckles.

I don't know why you fags come into a thread and just lie. I've already proven I will rape your ass with charts and facts. Just stop.

>I can, with a superbly high degree of accuracy, determine how much AT&T (for example) will pay out to investors in dividends in a given year
Unless they change the dividend rate, which they can do at any time. Or suspend it altogether, which they can also do.

Past results not an indicator of future performance.

You fags can't have it both ways: you can't argue that all growth stocks (((might))) go to zero tomorrow but that your precious dividends stocks will stay pay after a nuclear holocaust.

Thanks for jumping in the thread, but you're an unworthy advocate. Next!

>Actually they don't, not over any meaningful period of time.

cboe.com/framed/pdfframed?content=/micro/buywrite/pap-assetconsultinggroup-cboe-feb2012.pdf§ion=SECT_MINI_SITE&title=An Analysis of Index Option Writing for Liquid Enhanced Risk-Adjusted Returns

>I've already proven I will rape your ass with charts and facts
You've gotten wrecked every time you come in these threads

>Unless they change the dividend rate
Yeah, usually higher. It's kind of the idea behind dividend stocks: Reinvesting returns where the returns keep growing. It's what Warren Buffett's strategy ultimately boils down to and when there's a big dip in the market, he has the cash flow from dividends and other investment income to scoop up the opportunities.

>Every year the spread between Stock G and Stock D is going to get wider and wider because taxes aren't depleting any of your Stock G capital.

While technically true, the gap isn't as large as you portray. You're calculating the tax liability on stock D, but ignoring the tax liability on stock G when it's sold. You need to compare apples to apples.

When you sell stock G, you owe cap gains tax on the gain, while stock D has not appreciated but paid you dividends in lieu of growth, which have already been taxed.

After 10 years, the outcome of the two scenarios nets a difference of less than 5%.

Is that significant? It depends on whether you deem access to a recurring stream of capital, without having to sell assets, to be important. Some do. Some don't.

Again, this leaves out part of the picture. Dividend payments nor reinvestments are included in that chart; it's simply price appreciation.

Looking at PG (the worst performer), and assuming an initial investment in 2007 with no reinvestment, the stock would have paid an additional 27% in dividends (after 20% tax). Had dividends been reinvested, the return would have been greater. So the real return is not 41%, it's at least 68%.

DIS would outperform GOOG if dividends were included, and MMM would be close.

You aren't wrong, but you're misrepresenting how drastic the difference is.

The backtester I used only does 3 at a time. It shows the same period and $10,000 invested in each with dividends reinvested and, of course, no calls being sold on any of it.

All that said, Proctor & Gamble performed about on par with the S&P 500 and both Google and Disney vastly outperformed the market. However, by every indication, Google is substantially higher risk and higher volatility and it only did well because it had a few good years.

nevermind the fightposters, here's the eurostocks:

>MOTOR OIL (HELL.)
Greek refinery. high dividends and growing like weed so far. But yeah, they are greek, so proceed with caution
>ALLIANZ SE
German insurer. Classic German dividend darling
>INNOGY SE
renewableenergy subsidie of oldschool energy company RWE. High dividends and possible growth
>JP Morgan Global Income
Managed fund that only has the goal to pay out dividends, instead of growing in value.

Wouldn't want to base everything on dividends, but having some passive income is nice. Currently aiming for 1 to 2 addionial monthly salaries per year in dividends.

Why would you want to own European stocks? I mean, other than Swiss stocks or maybe Irish stocks.

Speaking of which, Nestle is a good one.

Berkshire Hathaway.

There's a great irony in that. Berkshire Hathaway, while itself does not pay dividends, invests heavily in things which do and continue to grow them. In lieu of paying that cash out to shareholders, they reinvest it back into cash-generating investments.

...

>Makes statements about returns of dividend vs non-dividend stocks
>Compares moonshot tech stock vs generic industrial over 10 years
>Best of all, doesn't include dividends in calculating returns after claiming to be charting expert
>Makes tax argument against dividends, ignores the fact that you reap 75k tax free yearly.

Pretty much the retardation I expect from your type

How random! :^D

Because the US is quite overvalued and due for a correction. EU might crash too, but if you want to take a gamble (french election…), it seems like a nice bet.

its called moving the goalposts

also buy O, best dividend

I disagree about things being overvalued. The EU is... Well, the EU. Why would anyone put their money in that hellscape of stupidity?

I don't know what goalpost you think is being moved.

Also, O is a REIT so the dividends are unqualified and they're taxed like ordinary income.

ORC

thank me later

guys, if you're not in Xavier's school yet, I don't know what the fuck you're doing, theyre making serious money right now.
great place to learn, but you will be kicked if you don't eventually learn TA or FA and improve yourself.

heres a link
discord.gg/ZxrzK

The best dividend stock out there right now is Ford Motor Company (F). All the stability in the world due to chicken tax. A healthy 4-5% dividend. Cheap entry price. What more could you want?

>The best dividend stock out there right now is Ford Motor Company (F)
>What more could you want?
I don't know ... maybe something that keeps pace with inflation? That keeps pace with the market?

Or am I setting the bar too high? How about a stock that has a positive 5-year return? Is that too much to ask?

You have indeed gotten wrecked every time you come in these threads. Buy/write -- like all options strategies -- only works is very specific, very defined market conditions. So unless you happen to have one of those elusive crystal balls, you're just a gambler like every other pud trying to time the market.

>ignoring the tax liability on stock G when it's sold
I haven't ignored it because its impossible to predict what it'll be. I could make wild-ass assumptions (as you apparently did), but in reality the scenarios for the disposition of a long-term stock are too varying to calculate. You do know its possible to dispose of appreciated shares with zero capital gains, right?

>two scenarios
Interesting that even under your made up assumptions, my point still stands. At you're more intellectually honest than most of the yahoos in this thread.

>You aren't wrong
I know. Charts don't lie.

Why are so obsessed with GOOG? Its one of the most recognizable pure growth plays, but its not even the best performing non-dividend paying stock. Go look at PCLN, BIIB, FB, or any of the top life sciences equities.

>Google is substantially higher risk and higher volatility and it only did well because it had a few good years.
Yeah, it really helps your attempts to misrepresent the facts if you conveniently leave out the "few good years" that run against your narrative. Jesus, the confirmation bias is palpable.

I see (You) failed to account for the low entry point. SPY is a $200+ stock. But don't that let get in the way of your sperg

>Compares moonshot tech stock vs generic industrial over 10 years
It was requested that I provide one stock that outperformed the self-proclaimed "dividend benchmark" stocks provided by the other user. I did just that. I've now provided 3-5 more.

See, when you jump in at the bottom of a thread and make stupid comments without reading, you sound like a retard. Stop doing that.

>the low entry point
Are you seriously suggesting that the relative share price of an equity has anything to do with ... anything?

C'mon man. The grown ups are talking here.

>Only investing in dividend stocks
user don't yo know you need to diversify your portfolio. All the best investors say so. That's why every good investor has an even spread of
worldwide growth stocks, worldwide dividend stocks, every single currency and cryptocurrency in existence, every single commodity, bonds, inflation indexed bonds, worldwide real estate, and lottery tickets. Diversity always makes a portfolio better.

Peter Lynch did this. It turned out it is really a great idea to buy everything.

investopedia.com/articles/stocks/06/peterlynch.asp

Warren Buffet? Is that you? Tell me wise one, which stock has more room to grow? The one sitting at 200 or the one sitting at 10? Show your work please.

but then again, The Dividend Aristocrats beat the market over the long run, so:

suredividend.com/11-reasons-to-be-a-dividend-growth-investor/

Peter Lynch added lottery tickets to his portfolio?

why am I on this board?

He called them "tenbaggers": Stocks that would go up 10x in price. I guess if he was young now he would buy half of the bigger cap shitcoins.

So basically the right thing to do is to diversify your holdings, and don't focus on a single asset class. Also be tax efficient where possible.

If only someone had said this 13 hours ago there wouldn't be so much fighting in the thread. Oh wait ..... (You).

>What is survivorship bias?
>What are pre-tax performance results?

user, this is what happens when you post a picture of a chart, but don't bother to look at the source data for the chart (nuveen.com/Home/Documents/Default.aspx?fileId=49963). You even linked to a picture that intentionally cut off the chart details and data source.

>user, be intellectually honest, thorough, and fair. We'll all be better informed in the long run if good people like you do the right things.

for me personally, I just sleep better if I have companies in my portfolio that are committed to grow their dividend since 10+ years.

Some stocks from my portfolio: JNJ, BA, FLO, TSE:TD

So basically I am buying great businesses with temporary problems ( like a lawsuit for FLO, JNJ before the buyout of Actellion and so on)

But then again this investment method is stopping me from buying GOOGL :(

Can you tell me any other great businesses besides GOOGL and BRK which do not pay dividends? (I am really curious, maybe I add them to my portfolio so I will be better diversified)

bc ur a faget

>companies in my portfolio that are committed to grow their dividend since 10+ years
>great businesses with temporary problems
Ah, the elusive value dividend strategy. Good luck with that.

>Can you tell me any other great businesses besides GOOGL and BRK which do not pay dividends?
I could, but you seem to be missing the point. You shouldn't go out of your way to avoid dividends in the same way that you shouldn't go out of your way to get them. Dividends are an unavoidable (and sometime highly desirable) consequence of owning diversified equities.

Focus on getting a well-rounded portfolio, preferably anchored by index funds. If you have the option, but your highest paying stocks in a tax-advantaged fund. At the end of the day, its just that simple.

To be clear, I'm not "anti dividend" (whatever that means). There's a few idiots in this thread who fail to grasp the subtleties of financial advice, and assume that I "hate" dividends since I like to point out their (truthful) tax disadvantages. Apparently this makes me "anti dividend" for some reason. The irony is that I make more in dividends in one year than these guys make in five years at their full-time jobs. I love dividends ... but in the correct proportion for my portfolio.

I was just curious because you seems to belong to the 1% of this board who actually know their shit and do not play around with small money.
I just tried to follow the Buffet strategy but has been only 1 year for me in the market so that is obviously nothing. So what would be your advice besides the very generic "diversify". For example you might tell me which stocks are you monitoring these days. For example I am keeping an eye on Qualcomm because I see some upside there due to the NXP merger and their patents, and ofc the dividend growth is not to ignore.

Yeah, sorry, a 5 year history ain't gonna' cut it but. Did you check out that study that looked back from the 80s to today? Ya' got rekt. :^)

Sorry, bud, you're the one who used each of those examples I included. Ya' got rekt. :^)

>I just tried to follow the Buffet strategy
Yeah, don't do that. Warren Buffett isn't a retail investor like you. He does mergers, acquisitions, and strategic integrations and combinations. He has billions in available capital and acquires huge and often controlling stakes in companies in order to streamline them and exploit cross-efficiencies with his other portfolio companies.

You (and me) can't do anything like this. We're not even playing the same game

I posted the five year chart to illustrate the point of my post. Trying reading more, and looking at pictures less.

To repeat myself (ugg), buy/write and all options strategies work well in specific, defined market conditions. In the case of buy/write, they outperform in times of severe market shocks. So when you look at periods that specifically include the 2008 crash AND the 2000 dot-com crash, buy/write looks pretty good. When you look at market periods without catastrophic spikes, buy/write looks pretty bad.

You're free to cherry-pick whatever dates serve your confirmation bias, kid. But last time I checked, secular bull markets exceed crashes in duration, frequency, and magnitude.

>#rekt

Is that really your argument: that because I used those 4 examples (3 of which were originally given to me by another user) suddenly the thousands of other stocks in the market don't matter? Is that what passes for logic or reason in your brain?

Sigh. I actually thought you might be an intelligent person worthy of an adult discussion. Very disappointing.

Nah, covered calls can quite easily produce annual returns upwards of 12-18% a year -- more if you don't mind possible entry risk by selling the intrinsically overvalued short term options. It's some pretty easy math behind it.

Moreover, selling in-the-money puts shows to be on of the best strategies out there. Although, personally, I'm not a fan.

>Is that really your argument: [nonsense]
Are you having a breakdown, user? I know it's hard to have your arguments destroyed by concrete counter-evidence, but I'm sure you'll get over it.

Bpt

IBM user, pick it up soon

>covered calls can quite easily produce annual returns upwards of 12-18% a year
So what? Straight equities have produced annuals returns upwards of 54% (1933).

See, I can cherry-pick data points too, moron.

>I recognize your posts, user. You're the guy who starts out trying to make well-intentioned but poorly educated posts, and then when challenged, your post quality degrades. I'm sure we'll be seeing frog memes and references to the Nikkei any time now.

Enjoy your options strategy. No one but you should care that it's an underperforming strategy, and if you're prepared to accept that, then all's good. It's not like you were gonna get rich anyway, right?

> I can cherry-pick data points too
See, here's the thing, it can be done *regularly.* 12-18%+ isn't some one-off thing, it's year in, year out. The reason it works is because options are intrinsically leveraged. However, if you're managing many millions of dollars or more, you won't be able to get fills too often because the options market isn't liquid enough to handle thousands of options being traded on a regular basis.

>it's an underperforming strategy
Only on the rare occurrence that the S&P rises like, 25%+ in a single year. Of course, if we're dealing with pure hypotheticals, you can make 90%+ a year selling weekly options so even then, the S&P lacks an advantage.

Here, I'll walk you through the simple math going off currently posted prices:

Buy 1000 shares of Verizon at $48.62 a share for a total of $48,620.

Note that Verizon has a steadily rising dividend per share currently at $2.31 for a total annual cash payout of $2,310 ($2.31 x 1000 shares) over the year (technically, it'd be higher because they're dedicated to increasing dividends every year, but we'll just be conservative here and assume it stays flat).

I can sell 10 call options (1 call is representative of 100 shares, so 10 calls covers 1,000 shares) which expire in June (~2 months) at the $49 strike for $1.10 per share that each option represents, equaling a total of $1,100 ($1.10 x 100 share representation per option x 10 options in total) cash received in total from the sale. However, since these options only last until June, the amount isn't annualized to keep benchmarks consistent. To do that, we divide the amount received ($1,100) by the number of days the options last (62) and multiply that number by the number of days in a year (365), so $1,100/62(365)=$6,475.80 in an annualized return. This figure reflects proportionality of return to an annual benchmark and the notion that if I sold a total of 6, 2 month options at the same price, I'd have $6,475.80.

(1/2)

Note: selling options in that consecutive manner is really the point of the strategy.


With the annualized return of $6,475.80 plus the $2,310 earned from dividends, this equates to total annualized cash flows of $8,785.80.

Now, to figure out the percentage annual return, you simply multiply the combined return of $8,785.80 by 100, then divide by the total amount invested of $48,620 to equal 18.07, or 18.07% which is your annualized net return.

You may have also noted that the call's strike price was $49 and the purchase price was only $48.62, so yes, if the price of the stock went up to $49 or more, you'd make the $0.38 per share difference in profit for an additional nominal return of $380. I'll just leave the return at 18.07% and call it a day, though.

Thanks for ignoring everything else in the post there Mr. Chart Master.

>herp derp I post pure stock price charts in threads about dividends

Honestly that's the funniest thing I've seen this week.

im not sure if i regret making this thread, but at least i got a very small amount of stock tickers to put on my dividend watch list. thanks i guess

Also, for your own sake, don't pull your hair out too much concerning the tax implications of dividends. In all likelihood you simply won't make enough to have them taxed anyway, which is why I find tax arguments concerning dividends hilarious.

Like I mentioned elsewhere, unless you have millions invested, your dividends are unlikely to be taxed. You're just too poor, for lack of a better word, in terms of the investor class.

No one here has enough qualified dividend income to have it be taxable, I can almost guarantee that.

You only need to make above ~$10,000 (if I recall the specific amount correctly) in total income to have to have your dividends taxed at the 10% rate. Even so, the highest rate caps out at 23.8% if you make six figures. In any case, the power of reinvestment and compound interest is still there.

Nah, look over page 44 of this:
irs.gov/pub/irs-pdf/i1040gi.pdf
Up through line 11.

Now tax policy is always up for grabs. US could go Euro socialist 60+% tax rates, who knows. But for now, you can be raking in nearly 100k in dividends with a sham marriage tax free.

Considering most dividends are

I'm not going to calculate that convoluted nonsense, but no doubt you're misreading or misunderstanding something -- perhaps that bit at the end of line 11? Capital gains collection rates don't back up the notion you can make 100K and pay nothing.

The IRS part seems more official than random internet sites, but you can google it.

moneychimp.com/features/capgain.htm

Again, I know, money chimp sounds pretty shit for a site, but the fact is that if you're in the 15% tax bracket, your cap gains rate is 0%. Married, 75k taxable puts you at the top of that bracket, + 30k in pretty standard deductions, and you're clearing over 100k in dividends tax free.

>it can be done *regularly.*
>ignores the chart 4 posts up where I prove it underperforms the S&P in normal market conditions
Look kid, if you want to gamble on your options play, that's your choice. But don't pretend it's some super-scientific secret way to beat the market. It ONLY works if your correctly guess the proper market conditions. That makes you no better than any other market timer.

Good luck with that.

>the rare occurrence
Here's the S&P performance since 2010:

Dec. 31, 2016 11.96%
Dec. 31, 2015 1.38%
Dec. 31, 2014 13.69%
Dec. 31, 2013 32.39%
Dec. 31, 2012 16.00%
Dec. 31, 2011 2.11%
Dec. 31, 2010 15.06%

Hardly earth-shattering stuff. Pretty normal, desu. And yet your buy/write strategy can't beat it. Really makes you think....

>Honestly that's the funniest thing I've seen this week
Possibly the only intelligent thing you've posted in this thread. How did we ever get along until your jumped in and started splerging? Thanks for the save, user.

>Also, for your own sake, don't pull your hair out too much concerning the tax implications of dividends. In all likelihood you simply won't make enough to have them taxed anyway, which is why I find tax arguments concerning dividends hilarious.
Dumbest thing said in the thread. Maybe. There's a lot of competition.

>hurr durr capital gains taxes only affect rich people

Ironically, the opposite is true. LTCG taxes aren't particularly progressive. The rich do much better on dividend taxes than the poor.

>if you're in the 15% tax bracket, your cap gains rate is 0%
I'm sorry that your life aspirations put your max annual earnings below $37,650. Have a happy life (if you can).

Protip: dividends count in AGI, so if you think your're clearing "100k in dividends tax free" you are indeed the dumbest motherfucker in this thread. Congrats!

Why would you even consider a dividend strategy in the first place? If you want a high dividend so badly, you can simply create your own "homemade" dividend by converting your shares to cash.

I still think you're missing the fact that your initial stock price graphs in no way show the effect of the company dividends on returns, but that's been mentioned quite a few times already.

As for your tax comments, what would the taxes be on 100k in divided income for a married couple according to you? Run it through any of the random tax estimators if you don't want to work through the worksheet on page 44 of the 1040 instructions. I linked one...

And yes, for my personal view, 100k for a couple post-tax is not a tragedy. Earned as wages the equivalent would be close to 125k gross. That puts a couple in the top 10%. It's a comfy lifestyle for most..

>if you want to gamble on your options
What's wrong? Could you not comprehend the math? You do know that covered calls are mathematically lower risk than buying naked stock, right?

>super-scientific
You mean simple math?

>It ONLY works if your correctly guess
No, no guesswork involved, really. If the market doesn't want to pay reasonably for my calls, I just won't sell them or I'll find another instrument to sell them on. The call premium earned is 100% quantifiable and a known-known before the trade even happens.

>the rare occurrence
Here's the S&P performance since 2010:
Yikes! Looks like you were searching for a point but shot yourself in the foot, lol! You've basically admitted that only once has the S&P 500 beat the 25% mark and only once has it even beaten my quantified scenario of an 18% annual return on Verizon. Good lord, this is hilarious.

I'm skeptical, but also single so I guess it makes little difference. What I know is what I have to pay on my capital gains and other trades.

Then you have to pay a lot of commission. If you're diversified and pay a commission of $10 a trade, you'll burn through your returns faster than you may think.

The tax structure on frequent short term options trading is a lot different than reaping dividends on a stock you've held forever. It shouldn't be too bad, but it won't be 0% if you net 100k with short term options strategies.

>I still think you're missing the fact that your initial stock price graphs in no way show the effect of the company dividends on returns, but that's been mentioned quite a few times already.
Blame that on the lack of good total return charting sites. But I'm happy to compare the best performing dividend stock cited in this thread (Disney - DIS) against the best pure growth stock cited in this thread (Priceline - PCLN). This is a five-year chart because that's all that M* offers.

#btfo
#rekt
#goodnightsally

>what would the taxes be on 100k in dividend income
Ok, I did. Shows tax owed. Just like I said.

Fuck, you're a retard.

>You do know that covered calls are mathematically lower risk than buying naked stock, right?
Lower risk and lower return. If that's what you're aiming for, great. I've already said that three times, moron.

If that kind of slow growth meets your goals and needs, great. 99% of people, however, would rather have the better returns of a straight equity portfolio, especially since the incremental risk is immaterial in the long-run.

I've already said that you're free to own your shitty under-performing portfolio if you want. Just stop pretending its anything other than a shitty under-performing portfolio and we'll be done here. Kay?

>If the market doesn't want to pay reasonably for my calls, I just won't sell them
For fucks sake, retard, you do know that options have an expiration date, right?

Why am I wasting my time debating a 10-year old?