This is a guest contribution by Barry D. Moore of Liberated Stock Trader
When it comes to dividend investing, there are a lot of factors you need to take into account. Dividend portfolios can be complex, and it’s important to find the right tool to help you manage them.
Here are ten important things to look for in the best stock market software:
1. Screening For Solid Financials
Screening and filtering by company size, sector, financials, and more: You need to be able to screen for stocks that meet your specific criteria. Even though a company is a great dividend payer, you want to be sure it is still growing earnings and sales.
2. The ability to monitor your dividend portfolio
You need to be able to track the progress and performance of your portfolio over time. This includes being able to see:
- News announcements
- Earnings calendar
- Dividends ex dates
3. The ability to see how your holdings are performing
It’s important to be able to see how each of your holdings is performing, so you can make necessary changes. While it is nice to receive 2% dividends per year, if the share price is dropping 5% per year, you may need to take action.
4. View specific dividend financials
There are three key dividend metrics that a great portfolio management tool needs to provide:
A dividend yield is the percentage of a company’s earnings that it pays out to shareholders in the form of dividends. This yield is calculated by dividing the company’s annual dividend payments by its market capitalization.
Dividend Payout Ratio
A dividend payout ratio is the percentage of a company’s earnings that it pays out to shareholders in the form of dividends. This ratio is calculated by dividing the company’s annual dividend payments by its earnings.
The dividend payout ratio is a helpful metric for investors to use when considering whether or not to invest in a particular company. A high dividend payout ratio can indicate that a company is generous with its shareholders, but it can also be a sign that the company is not reinvesting enough of its earnings back into its business.
Dividend coverage is a financial metric used to assess whether or not a company has the ability to pay its dividend obligations. The higher the coverage ratio, the better able a company is to pay its dividends.
5. Dividend History & Future Growth
An advanced income portfolio management tool will also provide the expected dividend growth rate based on historical data, stock price, and financial outlooks.
Consecutive dividend growth years
Any dividend kings or dividend aristocrat portfolio is based on consecutive years of dividend growth; any software you select need to have the consecutive years of dividend growth metric.
6. Dividend Forecasting
A high-quality income portfolio tool will have the ability to project your portfolio’s future dividend earning based on current yield. Dividend forecasting is a useful feature to have when constructing your dividend portfolio.
7. View charts (historical prices and dividends)
As a dividend investor, you are in the market for the long term. A good portfolio tool will enable you to plot financial metrics such as EPS, Sales, PE Ratio, and Dividend Yield directly on a stock chart so you can visually interpret the data.
8. Portfolio Rebalancing
No portfolio management tool is complete without portfolio rebalancing functionality. Why perform Portfolio rebalancing? Performing portfolio rebalancing is essential for maintaining an optimal asset allocation and risk/return profile. When one or more asset classes in your portfolio outperform the others, it will eventually become overweight and increase your overall portfolio risk. Rebalancing helps to bring your assets back into alignment.
9. Brokerage Connection
Having a solid portfolio management tool is great, but it needs to be able to connect securely to your brokerage account to report real-time your earnings and provide advanced portfolio analysis. This will save you a lot of time and energy and provide you insights, making portfolio rebalancing easier.
10. Future Portfolio Value Simulations Using Monte Carlo Analysis
A Monte Carlo simulation is a computer-generated probability distribution. It uses random sampling to estimate the behavior of a system that cannot be easily predicted. Why is this important for dividend investors?
A Monte Carlo simulation can be used to predict the future value of a dividend portfolio. This is a valuable tool for dividend investors because it can help them make decisions about when to buy and sell stocks and how much risk to take on.
When choosing a portfolio management tool, look for one that offers a Monte Carlo simulation. This will give you the ability to predict the future value of your portfolio and make informed decisions about your investment strategy.
When taking investing seriously, it is important to ensure you have the best tools of the trade. Free stock charting tools are OK, but when you are managing a real portfolio that your financial future depends on, you need two important things.
- The expert dividend research that Sure Dividend provides.
- The right portfolio management solution to enable your complete control over your investments.
About the Author
Liberated Stock Trader has helped over 50,000 students learn stock market investing using income, growth, and value investing strategies. Barry is a certified financial technician with IFTA and has published expert strategies on market-beating growth investing and index investing.
Other Dividend Lists
The following lists contain many more high-quality dividend stocks:
- The Dividend Aristocrats List is comprised of 65 stocks in the S&P 500 Index with 25+ years of consecutive dividend increases.
- The High Yield Dividend Aristocrats List is comprised of the 20 Dividend Aristocrats with the highest current yields.
- The Dividend Achievers List is comprised of ~350 stocks with 10+ years of consecutive dividend increases.
- The Dividend Kings List is even more exclusive than the Dividend Aristocrats. It is comprised of 44 stocks with 50+ years of consecutive dividend increases.
- The High Yield Dividend Kings List is comprised of the 20 Dividend Kings with the highest current yields.
- The Blue Chip Stocks List: stocks that qualify as Dividend Achievers, Dividend Aristocrats, and/or Dividend Kings
- The High Dividend Stocks List: stocks that appeal to investors interested in the highest yields of 5% or more.
- The Monthly Dividend Stocks List: stocks that pay dividends every month, for 12 dividend payments per year.
- The Dividend Champions List: stocks that have increased their dividends for 25+ consecutive years.
Note: Not all Dividend Champions are Dividend Aristocrats because Dividend Aristocrats have additional requirements like being in The S&P 500.
- The Dividend Contenders List: 10-24 consecutive years of dividend increases.
- The Dividend Challengers List: 5-9 consecutive years of dividend increases.