Everyone is searching for high dividend stocks. But they’re not all equal. You’ll make more money with the modest dividend stocks than you will with the high yielding stocks. Here’s why: (September 26, 2012)

by DAN WIN CTL VZ CTL WIN 
I’m Dan Fitzpatrick at Stock and OptionMarketMentor.com on September 26th. Today I want to talk about telecoms. Specifically Windstream ( $WIN Windstream Corp ) and also CenturyLink ( $CTL CenturyLink, Inc ) and here’s why. Aside from the fact that I saw this thing popped up on my scan tour, we had a big, big intraday reversal. I’m doing the research and I saw a pretty good article on the Motley Fool so you can check that out, just go to Yahoo Finance, you can read that article. In the article they were talking about the high dividends here of Windstream ( $WIN Windstream Corp ). This stock goes ex-dividend tomorrow so the company’s paying 25 percent quarterly dividend and on a stock that’s basically $10.00 that amounts to a 9.10, 9.1 actually a 9.6 percent yield from current levels, that’s a pretty good yield. But I noticed Motley Fools talking about this, about how there are fundamental issues, like is their, quote, “dividend safe?” I will tell you this; since you’re holding a stock you have to hold it all year long in order to collect that 9.6 dividend. Think about where it was in January, right there. If you bought it now where is it? Down there. You got a couple of dividends, sure, but the stock is trending lower, so I like the high dividends, but I’d only like to buy them on these big, massive dips like now. Would I buy this now? I just think it’s risky. Now CenturyLink ( $CTL CenturyLink, Inc ), which I’ve liked for quite a while, I talk about this all the time in Stock Market Mentor Strategy Sessions, you guys that are members know that, but I’m looking at this now, 6.9 percent yield; great! But with the stock coming out of a volatility squeeze to the down side; does it make sense to hold this stock that could go from 41 down to $39.00 and really have there kind of be nothing wrong with it? Otherwise it just kind of continues to stair-step higher and then sideways and all of that. This is just not where I want to be right here, right now. If I want to be in the telecom space I think it’s good to avoid these rural or regional telecoms and go for the big dogs. Look at Verizon ( $VZ Verizon Communications Inc ), it pays 4.5 percent dividend, it’s up at the top of the range right now and it’s kind of poised right for a little pullback, but this is a big company, it works, it’s also telecom. You know what? See here, domestic, we don’t have any Molotov cocktails in Madrid flying into Verizon’s ( $VZ Verizon Communications Inc ) company headquarters. This is a domestic telecom, you think they’re not going to do well, and you think that 4.5 percent is in trouble. I don’t. What about AT&T ( $T AT&T Inc )? This is a 4.6 percent dividend and look at the trend here, look at the 50-day moving average. The bottom line is, and I know we’re got some people, a lot of people, who are making good money at Stock Market Mentor on these Yield Hogs, these 10 plus percent a year dividend stocks that jan2138, one of our revered and esteemed members, comes up with and a lot of folks are banking a lot of money; but what I’m saying is, with respect to telecom, they’re not all created equal, don’t just go for the big dividends, realize that there are two ways that you’re going to make money on a stock; number one, the dividend, number two, the capital gain or the price appreciation. We want to see this type of thing; when you’ve got price appreciation like this it can make up for a yield that’s only 4.6 percent, you know as opposed to a 6.9 percent or a 9.1 percent. I would rather take Verizon ( $VZ Verizon Communications Inc ) or AT&T ( $T AT&T Inc ) any day. Any pullback, say to the 50-day moving average, that’s when you pull the trigger on this thing and then just enjoy the 4.6 yield ride. Members, get over to the Strategy Session, I have a lot to say about metals and mining and also housing and various other things; so get over there now.

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