How to Find Dividend Stocks

What are Dividend Stocks?​

Dividend stocks distribute a part of a company’s earnings to their investors on a regular basis.​

Companies that pay high dividends tend to be well-established. They usually show a stable earnings ability, thus adding some stability to your portfolio.​

Research finds that stocks with increasing dividends tend to have higher earnings than those that keep the same dividend over time, cut dividends, or do not pay dividends at all.​

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Source: Compustat, Ned Davis Research, S&P Capital IQ, and S&P Dow Jones Indices.​

How Do you Find Dividend Stocks on Webull?​

Go to Market>Explore. Scroll down to see the ‘Dividend Stock List’. Here you can see all the dividend-paying stocks tradable on Webull. Rank them by dividend yield, P/E, or one of the other options available.​

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What are some Standards to Evaluate Dividend Stocks?​

There are thousands of dividend-paying stocks in the market. Are stocks with higher dividend yield always the better? Not necessarily.​

1. Dividend yield is important, but it’s not everything.​

A Dividend yield is how much income a share generates in a year relative to its stock price. It could be considered when picking dividend stocks, but it’s not everything.​

Let’s look at the calculation first.​

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A high yield can mean two things: either the dividends increased, or the current share price dropped.​

For your reference, the S&P 500 dividend yield was only 1.69% in June 2022. If you see a dividend yield way above 10%, find out if there is a good reason for that.​

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2. The fundamentals—steadily growing earnings are essential.​

It’s also important to consider financial performance when choosing a stock.​Choose a symbol and go to the details page. Click Company>Financials to see the fundamentals.​Take a look at two things: the total revenue and earnings per share (EPS).​

• Total revenue shows the total income the company generated in the last quarter.​
• EPS, on the other hand, shows how much the company has earned for each share of the stock.​

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Steadily growing revenue and EPS are evidence of sustainable growth.​

Tip: How can you check the historical financial performance of a stock on Webull?​ Choose a symbol and go to the details page. Click Company>Financials to see the fundamentals.​

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3. Moderate P/E ratio—is the stock fairly valued?​

The price-to-earnings (P/E) ratio often refers to the 12-M trailing (TTM) P/E.​

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P/E ratio reflects how much an investor will pay for one dollar of a company’s earnings over a year. Stocks with high P/E can be considered overvalued, while stocks with low P/E can be considered undervalued. Compare a stock with other companies in the same sector to determine an average P/E of its peers.​

However, there is no standard for determining what is high and low. For your reference, the long-term average P/E for the S&P 500 is around 16x, which means investors are paying an average of $16 for a share in the S&P 500.​

On Webull, investors can check the rank of a company in ‘Peer Comparison’ (as shown below). Look at the rank to see if it’s fairly priced.​

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Starting Small? It can add up.​

Many people dream about investing in a stock and getting rich overnight. Unfortunately, this is not usually a reality. To create a long-term portfolio, it’s important to add stability and sustainability. Dividend stocks can help.​

Once you have chosen a suitable stock to trade, you can set a recurring investment to invest a small amount regularly. Small amounts can add up. Before you know it, you have made a big investment.​

Check below to see how to make a recurring investment on Webull.​

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