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Gunnarsdaddy (43.38)

Trying to find dividend stocks

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October 24, 2013 – Comments (5) | RELATED TICKERS: GNI

I'm at a point in my life where I regret NOT investing more, sooner, and where I want to maximize my investments quickly.  Well, at least I want them to grow, and without the problems that I've run into before.

You see, my first real exposure to investing was being told, about 11 years ago, to look into a company called Sharebuilder.  I wasn't able to buy 100 shares of anything at the time, but I could invest $100 a month.  But I didn't have a plan, and I picked some investments that didn't turn out so well.  Some did, and my 'plan' became "Keep investing and wait".

Now, though, I've been doing more research, and I've got a new plan.  Right now, I'm searching for good dividend stocks that will help grow my holdings.  And I found one that I really like - Great Northern Iron Ore (GNI).  I ran a search on stocks that allow automatic investments, with a dividend greater than 10%, Beta less than 1, and P/E ratio less than 21x.  

I chose those, because I want BIG dividends!  I didn't want to pay a huge amount, and if I change my monthly auto-invest, I want to pick up at least one share a month.  And, I'm still in a learning phase, so this helped me understand just what Beta means (it's the potential volatility of a stock, in case you're new, too - lower is less volatile).  To recap - high dividend, low volatility, moderate cost, and the ability to set it and forget it.

GNI holds and leases property to miners, in Minnesota.  They've paid out dividends for the past 4 years - nice solid dividends.  Earnings per share is down, but by less than the industry overall.  Some of the others that turned up didn't fit with my overall plan, and by excluding those, my eye was drawn to GNI.

For my plan, this will be a good way to help build my investments.  I want the dividends to be re-invested, and I plan on holding this stock for a while - though I might be inclined to sell if it either increased in price by 25%, or dropped about 8%.  (I don't have a position, yet, but am planning on purchasing early next week.)

If you're just starting investing, and don't mind doing some research yourself, look at setting up an automatic investing account, and learn about the terms that you'll see when looking up a stock.  Consider starting with stocks that historically pay out dividends, and re-invest those, as this will help you build your portfolio over time.

5 Comments – Post Your Own

#1) On October 24, 2013 at 6:06 PM, afewgoodstocks11 (28.74) wrote:

I wouldn't.

 

If you're serious then you need to be safe. As an amature, i choose mid caps and larger. Stocks that have 10 years minimum of dividend raises at greater than inflation. With low PE compared to their history and their peers.  

 

 

 

 

 

 

 

 

      Sharebuilder is great. Some multiyear lows i would consider...MCD, XOM, KO, BP, VIP...... MO?, RAI, PM?

 

 

 

 

 

 

 

 

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#2) On October 24, 2013 at 8:24 PM, awallejr (83.92) wrote:

I am with #1.  GNI isn't really an ongoing concern.  It is basically a trust that gets paid for mineral rights but I believe it eventually disolves in a couple years.

A few names to consider is AINV, NCT, PSEC for low priced stocks.

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#3) On October 24, 2013 at 8:28 PM, HarryCarysGhost (99.70) wrote:

Read this-

http://www.gniop.com/

And tell me if you still think it's a good investment (If so an index fund might be right up your alley)

 As far as reinvesting goes Scottrade is offering a flexible reinvestment plan (F.R.I.P). Basically it puts all of your dividends into one pool of money and buys shares of any dividend paying company (your pick, thus the flexible part).

 Or many dividend aristocrats offer a reinvestment plans through the company Some at no charge (G.E off the top of my head), or others go through Computershare with a nominal fee involved (KO, which I own and invest that way with).

Just check the websites of the company your interested in under FAQ and it will tell you if they offer a Drip.

Hope this was helpful and if you have any questions feel free to ask.

Best of luck. 

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#4) On April 17, 2014 at 2:16 PM, MMCapitalMgmt (99.76) wrote:

I highly recommend you get back to school. GNI is a terrible investment.

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#5) On April 17, 2014 at 3:28 PM, grankh (75.20) wrote:

I think you should look harder into GNI.   One striking thing is that it dropped about 80% since January, (from about $65 in early January to about $17.18 now).   That is a big reason that the dividend is so high.   From experience, if you have a stock paying such a high dividend after a big drop, the dividend usually does not last.

Secondly, if you had invested $10k in this stock 5 years ago, your investment would only be worth about $4,382 today, (according to data from my brokerage.   You can check this through historical prices on Yahoo! Finance.)

So a recent huge drop and a long term loser.   Does not seem to be a good stock in my book.  On the other hand, a stock with a play in the same area, (iron ore mining in Minnesota), you could look at MSB as a comparable.  MSB has stayed fairly flat around $21 over the past year and pays about a 8% dividend yield.   And if you had held it for 5 years, (which until recently I did), your initial $10k investment would now be worth $42,040.  So if you want a Minnesota iron ore play, I would say that MSB would be a better play, (though I would hold off on buying it, as the current market movements on the stock are negative, so I would wait for it to bottom out before investing in it).

Just my two cents. 

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