Many publicly listed companies share profits with shareholders by making dividend payments. Since dividends are tied to revenue, the most profitable firms are usually the ones that pay the biggest dividends. Companies do not have to pay dividends to shareholders and may stop issuing dividends at any time, but large, well-established firms tend to pay dividends more reliably than smaller, less-established firms.
Instructions
1. Write a list of major companies in different sectors of the economy that you are familiar with such as energy firms, communications companies and financial firms. If you invest in firms that you deal with regularly and are in the public eye, then you can more easily gauge your investment than if you invest in a little-known company that you have no dealings with.
2. Go to the website of the New York Stock Exchange and look for the companies on your list by selecting the NYSE and then entering the name of each firm into the search directory. You can find out the current cost of each firm's stock and click on the links to the company's own website to find out details about past dividend distributions. Using this information, find out which of the firms on your list have a track record of paying the highest dividends.
3. Set up a brokerage account either online at the website of a major investment firm or by making an in-person visit to a local bank or investment firm. Online accounts are known as discount brokerage accounts and do not include financial advice. If you set up an account with a local broker, you should discuss the stocks that you researched with the broker and ask the broker for recommendations of other stocks that pay high dividends.
4. Review your bank account to determine how much surplus cash you have after setting aside money to pay bills and cover other upcoming expenses. Write a check to your broker for the amount that you wish to spend on the stocks, or enter your bank account information into the website of the online broker so the broker can electronically transfer funds from your account.
5. Submit your purchase request by instructing your broker to spend a certain amount of money on the stocks that you wish to buy or by instructing your broker to buy a set number of stocks. Stock prices fluctuate constantly so you can put a cap on the price you are prepared to pay, in which case the broker will not process your order if the cost exceeds the cap. Tell the broker whether you want your dividends reinvested in new stock or mailed to you in the form of a check.
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