Re: Simple Dividends Question
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WM's dividends is currently 6.3%
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Good example. If you think WaMu can maintain this dividend and grow the business, this is a screaming buy when you compare to treasuries at under 5% and no growth potential.
But usu when you find a div yield this high, it's because there are serious concerns the company won't be able to maintain the dividend. I don't know much about WaMu but there is quite a bit of uncertainty in their industry right now!
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But if the stock price will just drop by the amount of the dividend, then doesn't that offset the 6.3% gain? How do we benefit? If we wanted cash, couldn't we just sell some of the stock before the dividend?
Sorry to be so obtuse but I just don't understand. [img]/images/graemlins/confused.gif[/img]
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