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Investment in shares with high dividend payments

Updated on June 11, 2012

Table of content - Investment in shares with high dividend payments



The common trend today is to invest in shares for the capital growth they offer because of price increase over time. However, few people buy shares for the dividends paid.

When you buy a share you buy a unit of that company. You become a co-owner of that corporation and your share represents a certain percentage of that company. This entitles you to receive part of the profit.

Most corporations pay dividends to shareholders. Today, when I am writing this article, one Microsoft share (MSFT) was 32.26 $ and for each share Microsoft pays around 0.8 $/year (annualized dividend).

The price of one Apple Inc. share (AAPL) was 599.55 $ and the annualized dividend was 10.6 $ for each share.

Usually corporations pay annual or quarterly dividends, but there are companies that pay monthly dividends. Alpine Global Dynamic Dividend Fund (AGD) pays 0.06 $/month for each share. The price of one share at the date is 6.06 $ and the annualized dividend is 0.72 $.

The reason I am interested in shares with monthly dividend payments is because I want to use dividends to build a passive income. Another reason I like monthly payments is because you can use dividend compounding more efficient to increase your portofolio (you can read this hubpages article about dividend compounding).

If we invest 60,600 $ in 10,000 Alpine Global Dynamic shares we will have a passive income of 600 $/month from that portofolio (passive income = you don't have to work for that money).

A quick way to evaluate the earnings from shares is the P/E ratio. The P/E ratio is the price of a share divided by the annualized dividend.

In case of AGD, if we divide the price per share (6.06 $) to the annualized dividend (0.72 $) we will get a ratio of 8.41 to 1. This means for each 8.41 $ invested in shares, we will get dividends of 1$ per year.

We can extrapolate the P/E ratio to monthly dividends. If we divide the price per share to the monthly dividend we get the monthly P/E ratio, which is the method I use to evaluate my investments.

If we take the same example of AGD shares, the monthly P/E ratio will be 6.06$ / 0.06$ = 101. This means that for each 101$ invested in shares we will get a monthly cashflow of 1$. This is important when investing for dividends.

Let's take another example, ARMOUR Residential REIT Inc. shares (ARR). The price for one share is 6.75$, annualized dividend is 1.44$ and monthly dividend (mean) is 0.12$. The monthly P/E ratio will be 6.75$ / 0.12$ = 56.25. In this second example, each 56.25$ invested in shares will get 1$ per month.

If you compare the AGD and ARR shares from the dividend payments point of view, you will see that it's more profitable to buy the ARR shares than AGD shares at the moment.

The monthly P/E ratio is a good and quick way to evaluate investment efficiency regarding dividends. However it shouldn't be the only way you evaluate the investment. It's always the best thing to ask for a specialist advice when it comes to share investments.


GLOBAL UINVEST NETWORK - buy shares with high dividends

The method I use to invest in shares with high dividend is through Global UInvest Network (GUN - see the website at the bottom of this article). GUN is an online platform, designed for investments in verified businesses from Europe. GUN has a groups of specialist which identify and analyze investments projects. Each investment project that qualifies as valid is posted on the GUN website and investors can buy and sell shares. Click the image on the right to see how projects appear.

Some of the projects currently available at GUN to invest in are:

  1. Alcoholic beverage plant,
  2. Group of restaurants,
  3. Hotel and entertainment complex,
  4. Grain products complex,
  5. Entertaining club,
  6. Motor plant,
  7. Chemical plant,
  8. Woodworking complex or
  9. PVC panels plant.

Those are only few examples, there are more than 40 projects at the moment available for investing on the GUN platform.

The monthly P/E ratio for the projects available at GUN is from 10:1 to 5:1.

GUN has a well diversified offer of shares. You can buy shares at 21.24$/share with a monthly dividend of 2.2$ or you can buy shares at 3200$/share with monthly dividends of 653$/share (at the date).



There are three steps if you like to invest in projects offered by GUN.

1. Create your account - it's free to create your account. You can explore the website and see the available projects or participate in the forum discussions.

2. Add Funds - you can add funds to your GUN account (no minimum required). You can add funds by wire transfer, check payments, AlertPay, PayPal and Liberty Reserve

3. Buy shares and earn dividends - with the funds you added you will buy shares available from different projects. For each share GUN will pay you the corresponding dividends.


You can view all your shares with the purchased date, the price of purchase, dividend amount and the date of the next dividend payment.
You can view all your shares with the purchased date, the price of purchase, dividend amount and the date of the next dividend payment.


Because GUN expands also through referrers, you can get the support of your upline.

After creating your account, go to the ACCOUNT MANAGEMENT and at your Profile Page see the user that appears at Your upline row.

Copy the username, go to Private Mesagges button and send him a message with your questions. See the image at the right for detailed explanation.

My GUN username is Viviatus so if you have questions about GUN you can create your free account and then send me a private message to that username.



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