Top 100 companies paying the highest dividends

Knowing the top 100 companies paying the highest dividends in 2013 can help you build a portfolio of sustained monthly and quarterly income. If the thought of passive residual income in the form of dividend payments sounds appealing then by starting with a list of 100 dividend paying stocks and then reducing them to five or ten using fundamental and technical analysis can help you create a portfolio which generates income as well as capital growth.

What Company Pays the Best Dividend?

I have included a list of the top 100 dividend paying companies which you can use to start your analysis below. The best investment you can make as a new investor is to learn about fundamental analysis; fundamental analysis is the process by which you can determine the strength of a company. You need to look at data for the last 5 or 10 years, the more further back you go the better you’ll get to know the company.

Highest Monthly Dividend Paying Stocks

Before you get investing in the highest monthly dividend paying stocks you need to fundamentally analyse all 100 companies and whittle them down to 10 or 5, you need to analyse the profit, revenue, debt, leverage, PE ratio, PEG ratio and management of the stock and then put them in a table to find the best 5 or 10.

By placing the top 100 highest paying dividend companies in a ranking table you’ll be able to choose a balanced portfolio of stocks that are fundamentally strong yet pay a very good dividend on a quarterly or monthly basis. Your aim should be to avoid high paying dividend companies that are week and opt instead for companies which are financially strong and have the strength to withstand bear markets and thrive during bull markets.

Companies with High Dividend Yields

You should try and balance high dividend yields with stocks that pay monthly and quarterly yet have strong fundamentals, this will allow you to generate more frequent income which you can reinvest into your portfolio. Once you choose your top 5 or 10 stocks from the list of 100 you should try to get the best entry price.

For example if you’re planning on buying INTEL (INTC) which is currently trading at $22 for $20 then you can sell Naked Puts at $20 strike, this means that you will receive a premium every month until the stock reaches $20. By writing or selling out of the money puts you could generate income while you wait for the stock to reach a support.

Companies Paying Highest Dividends

If you’re still worried about capital preservation then you could insure your position at a predetermined level. If you buy INTEL (INTC) at $20 then the buy a yearly Leap Put Option at strike price $20 then you will insure your position for a year, even if the stock market crashes you’ll still receive $20 per share.

The reason why investors avoid insuring their position is because a yearly put option is expensive however if the yearly dividend payments exceeds the price of the yearly put option you’ll have a guaranteed profit.

Highest Dividend Yielding Stocks

Another strategy that you can use on the highest paying blue chip stocks to cover the cost of the insurance is the covered call strategy. A great analogy to demonstrate the effectiveness of combining a protective put and covered call to create the married put is the car sale example, when you buy a car (the stock) you insure it against fire and theft (Yearly Put Option), no one likes to pay for insurance so you could rent out the car for a few days a week (Covered Calls) to pay for the car insurance (Yearly Put Option).

If you can insure your stock and then sell monthly covered calls to finance the yearly put option you could effectively bullet proof your portfolio guarantee all the capital that’s in the portfolio, you would not have to pay for the insurance as it is being financed by renting the stock out and you would enjoy high dividend payments on a monthly or quarterly basis that you could reinvest back into the portfolio.

Example of Protective Put and Covered Calls to Create Married Put

1. Current Price of INTEL is $22
2. Sell Naked Puts at $20 for $1 (You will receive $100 per month until stock reaches $20.
3. You receive dividend payments of $1 per quarter - Total $4
4. You buy a yearly put option at strike $20 for $3
5. You sell covered calls monthly at 0.25 cents or more to finance the put
6. You protect your position for free and get paid dividends while your upside is unlimited.

Top 100 Companies Paying the Highest Dividends

Analysing and then investing in fundamentally strong companies from the top 100 companies paying the highest dividends in 2013 will help you to generate passive residual income on a monthly or quarterly basis. If you can choose stocks wisely and avoid high flying stocks with little shelf life you will end up with a portfolio that is balanced in terms of risk and return, the portfolio should be able to survive a recession and cope during bear markets while performing well during bear markets.

You should also get into the practice of fundamentally analysing your stocks on a yearly basis to see if anything has made the company weaker and then replace them with stronger stocks which pay a similar dividend, if you can rebalance your portfolio every year you will be able to remove the weaker stocks with stronger ones so your portfolio will become more and more financially stable as the years go on. Here are the top 100 companies paying the highest dividends in 2013.

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