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Dividend Having to pay Cramer’ utes ‘ Must Own’ For the Portfolio Investors have to own a minumum of one stock with a large, high-yielding dividend, Cramer stated Friday. “ Dividend Paying Stocks might not be as sexy because speculation or high-octane development names, but guess what happens? ” asked Cramer. “ That needs sex attractiveness, dividends work. ” The actual “ Mad Money” host said which buying high yielders after which reinvesting the returns is “ one of the biggest ways to earn money out there. ” This allows one’ s investment to compound with time, meaning the money out of your dividends pays returns. Although some believe high-yielding stocks are to create income for pension, but Cramer stated that since The month of january 1926, roughly 40 percent from the return from the actual SP 500 originated from reinvested dividends. He thinks higher yielders are safe because since the share price drops, the yield increases and finally gets to an amount where it’ utes too attractive with regard to investors to disregard. Cramer additionally likes accidental high-yielders, that are stocks that yield a lot more than 4%. When their own share price drops, the yield raises. That’ s why he or she likes stocks of companies which have recently raised their own dividends, as a dividend hike is among the clearest signals administration can send about the effectiveness of the business. “ A business that can increase its dividend is one which has steady, dependable growth, ” Cramer stated. “ Equally essential, it’ s a company that you could be pretty very sure won’ capital t be cutting the actual dividend anytime quickly. ” With regards to high-yielding dividend shares, Cramer said which while high produces are attractive, it is also a sign how the dividend is unsustainable and must be cut. To determine set up dividend is secure, he recommends taking a look at the earnings for each share. If a business has earnings which are greater than two times its dividend payment, Cramer said it may likely sustain the actual dividend even in lean instances when the earnings reduce in size. If the income aren’ t more than twice the dividend payment, look at the money flow. Companies with lots of depreciation and amortization costs will probably have lower income. It’ s also vital that you examine the balance sheet to make sure there isn’ t a large amount of debt coming due soon that could require a dividend reduce, he said. To gather the dividend, Cramer said the only real date you should worry about is the “ should own” date. This is actually the last day you can purchase a stock in order to claim its following dividend payout as well as it’ s always your day before the ex-date. “ A person absolutely must personal a high-yielder, ” Cramer stated. “ Dividends safeguard your stocks, as well as they’ re also a powerful way to make money. ” View this post on my blog: http://stocktips.valuegov.com/dividend-having-to-pay-cramer-utes-must-own/