How to select stocks with exceptional returns
When you read specialized magazines, the dividend yield you read is the one obtained from the ratio between the dividend distributed the previous year and the current quotation. In some cases, therefore, the result obtained could be misleading. In this article we explain how to correctly identify the highest dividend stocks in the world.
How do you identify the best performing stocks in the world?
The yieldunderstood as the percentage obtained from the ratio between the distributed dividend and the current quotation, of a stock must be evaluated very carefully.
Suppose a company always distributes the same dividend. At this point the yield will depend only on the performance of the quotations. For this reason a falling stock (assuming that it manages to guarantee the distribution of the dividend) could appear in the tables of specialized magazines as one of those with an exceptionally high yield. In reality, in these cases the probability that prices will continue to fall is very high and, therefore, the dividend yield could be rapidly depleted by a bad performance.
This means that in selecting the stocks with the highest dividends you will also need to look at at least the last year’s performance.
How to choose the best dividend stocks
But what are these stocks with the exceptionally high dividends?
For this analysis, we limit our search to US and European stock exchanges only.
The company Sino AG, listed on the German Stock Exchange, has distributed a dividend of 56 euros during 2022 for a yield of over 200%. In previous years, however, the yield had been less than 4%. Furthermore, in the last year the performance has been negative by more than 65%. Surely, therefore, we are in the presence of a title that should hardly replicate what happened nin 2022.
ZIM Integrated Shipping is a stock listed on the NYSE which in the course of 2022 has distributed a dividend with a yield of more than 150%. Also in this case its sustainability could be very difficult, if not impossible. Moreover, the leap in yield is also attributable to a performance of -75% over the last year.
A very interesting example, however, is that of the Chesapeake Granite Wash Trust, a stock listed on the American Stock Exchange. In this case, despite a performance of around 50% in the last year, the dividend yield remains above 20%. This, then, could be among the highest paying stocks in the world for serious consideration.
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