Step 5 in Building a Dividend Portfolio: Research

This is the fifth in a series of articles elaborating on the 9 Steps To Build and Manage a Dividend Portfolio. Research is where Do-It-Yourself investors really start to get their hands dirty. A certain amount of education is needed to start doing some stock research, and continued stock research will educate a researcher over time to a more thorough degree. In addition, over time, researchers will develop a personalized framework, or efficient series of steps, for screening investments and then looking deeper into some of them. When looking for potential investments, I approach it broadly and then focus in on specific companies that appear promising. Screening Process First, I begin broadly screening large numbers of companies to look for potential gems. Various investing blogs and sites can provide a lot of help here by regularly providing ideas. These can range from analysis articles to lists of potentially good investments under a common theme. In addition, there can be some amusement in perusing these sorts of materials for those that have a genuine interest in business and investing. In addition, some larger entities like Seeking Alpha, Morningstar or the Motley Fool can provide flows of stock ideas. Stock screens can also be a big help here. Sites like Google and Morningstar, among several others, offer stock screens. Stock screens are programs that allow you to select certain criteria to limit your search. For instance, you could look for companies with a dividend yield of over 4% with a debt/equity ratio of under 0.5, and a P/E of under 15, and get a list of companies that currently meet that set of criteria. It's good to try several stock screens to figure out which ones you are most comfortable with, and which ones are the most powerful and precise.... Read more