If you are looking for a way to make some passive income, then dividend investing may be for you. Dividend investing is one way of earning and making money in the stock market. It is when you buy a company’s stock that pays dividends. Many large companies have dividend paying stocks, so it’s not difficult to find one. A dividend is essentially a part of the earnings by the company among its shareholders.

Why do people invest in dividend paying stocks?

Investors take part in dividend paying stocks because it can bring them income in the coming years. All they have to do is buy a stock that pays dividends. Of course, you should analyze your options every now and then, and make sure that you are getting the best value of your money.

It would take a lot of money invested in dividends stocks before you could actually live off of solely dividends. But, in the long run when you are older, you could get to the point where it can bring extra income, especially if you reinvest the dividends that you receive in the beginning into more dividend paying stock.

My personal picks for dividend stocks

Not all listed companies in the stock exchange pay dividends. Some companies don’t make money so they don’t pay dividends. Some companies do very well but they don’t give dividends because they need money for expansion. Some pay dividends once in a while and some pay very small dividends. Some companies pay out cash dividends or stock dividends. If you are going to invest in dividend paying stocks, you need to do your homework.

Here are my 6 top picks for dividend stocks – based on the companies’ reliability to pay out dividends and P/E (Price-Earnings Ratio)

• Philippine Long Distance Telephone (TEL)
• DMCI Holdings (DMC)
• Manila Electric (MER)
• First Gen (FGEN)
• Banco de Oro Unibank (BDO)
• Megaworld (MEG)

Do you invest in dividend paying stocks? Why or why not?

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