Show HN: An index of all monthly dividend stocks

Show HN: An index of all monthly dividend stocks(thedividendlist.com)

154 points by mystertea 2 years ago | 107 comments

In my quest for finding high yield dividend stocks, I've noticed there isn't really a good tool for finding such stocks (that I can find, anyway), only pay-walled sites that are confusing and inaccessible. This little project seeks to remedy that.

I'm sharing this in the hopes that you'll find it useful, but also to get feedback, in particular, about monetizing. While I built this to be useful, I would like to make some money on it, so if you have any recommendations, I'm all eyeballs. I fear I may have to resort to advertisements to keep the barrier to entry low.

anonu 2 years ago |

* "index" has particular connotation in finance. This is just a list - not an index.

* Why "monthly"? There may be higher quality companies that pay quarterly. Why exclude them?

* Have you looked at the myriad dividend ETFs? Things like SDY showcase funds that have regularly raised dividends YoY. ETFs may be a better way to get consistent yield and yield growth. Look into SDY, DVY or higher-powered div rates with SDIV, SRET.

* Lots of people noting tax treatment of divs as well as pointing out the "dividend irrelevance theory". Tax treatment will vary depending on the type of income. If you're looking purely at equity dividends then they will most probably be treated as income. However, with ETFs you may be exemptions depending on the income source. For example US Treasury ETFs that pay dividends are exempt from US State taxes (look at Bondbloxx suite of treasury ETFs). Municipal bond ETFs are exempt from both state and federal tax in most cases.

* Dividend irrelevance: If a $100 stock pays $1 div then its stock price is adjusted to $99. So there's no free lunch. The point is you want cash-flow generating businesses where management has decided they don't really know what to do with extra cash laying around so they hand it back to their shareholders. Being able to consistently generate these dividends and GROW the dividends indicates typically high quality, value stocks. The short-term end of the yield curve is yielding 5.4% (https://www.ustreasuryyieldcurve.com/) right now... so a company would -- very broadly speaking -- need to engage in projects with hurdle rates greater than what they could get in very safe bets with the US Government.

* Other forms of yield harvesting or income generation are writing OTM calls. A consistent strategy can be found in ETFs like JEPI or XYLE

* Re: monetizing your site. The web is awash with finance websites. This data can be found in a screener tool (finviz.com amongst many). People want trading ideas, so maybe this is better served as a newsletter or similar. Also, why should I trust your site. Financial data is notoriously finicky. Old data gets re-stated. What are your data sources?

mystertea 2 years ago | |

You make some good points here.

1. I stated index in this post (whoops); luckily I called it a list on the website.

2. Partly, in seeking an income strategy, that seemed important to me. Also, frankly, it allowed me to limit the scope of my dataset a bit. Maybe I should go back to the drawing board and include quarterly stocks as well, though.

3. I'll look into it

I'll jump ahead and answer your last question as it's relevant to the others: I'm using Polygon.io's API to pull financial data. I too have noticed that the data can be unreliable, repeats, and has many records missing certain data. I've sanitized that data on my backend, checking for and removing duplicates, as well as only displaying historical records with adequate data. Beyond that, I'm not sure how to improve the quality.

4. What about dividend reinvesting? Can't you avoid taxes if you do that?

5. Is that also true with leveraged funds? It seems like many of these high yield dividend stocks are in that category.

6. Interesting, I'll look into that.

Hope I responded to all of these points adequately. I appreciate the thoughtful and intelligent answer. I'm still not sure (and need to do more research) on whether such a dividend strategy is useless. It seems like reinvesting could provide good returns as a strategy--when the stock dips, so long as the payout is constant, you simply get more income. Maybe I'm missing something, though.

gen220 2 years ago | | |

Re 4: reinvested dividends are still taxable income.

The way companies get around this (return value to shareholders without triggering a taxable event) is by repurchasing and retiring shares.

For example, there are 100 public shares trading at $1/share. At the end of the quarter, the company has a spare $1. If they issue a dividend, every shareholder gets $0.01, which is taxed.

Instead of issuing a dividend, they repurchase 1 share for $1. Assuming the value of the company hasn't changed, the per-share price should now be $1.01. Basically, they gave you an untaxed $0.01 increase in equity value, which you can choose to recognize on your own schedule.

This might give you another idea, which is to list companies with stock repurchase programs.

Also, re 3: make sure you account for the expense ratio of these funds. Since dividends are relatively volatile (lots of new entrants and exits on the margin), you might be surprised by how much these ETFs charge for their service. Sometimes, it's justifiable as a price worth paying. Other times it isn't, use your judgement and VOO as a benchmark of what bare-minimum expenses look like.

As an example, USOI's expense ratio is 0.85% and VOO's is 0.05%. Over long holding periods, a 17x higher expense ratio is extremely meaningful.

daydream 2 years ago | | |

> 4. What about dividend reinvesting? Can't you avoid taxes if you do that?

No. Dividends that are reinvested are still taxable.

user_named 2 years ago | |

Wrong. You claim that AAPL goes from $100 to $99 when it distributes $1. The only way that mean anything is if you also claim that the next year, AAPL hands out $1 and drops to $98.

Clearly that is not how the stock price has developed over the years. Dividend paying stocks don't decline in price. They increase in price, just like any other stock. And some decline, like any other.

hsjqllzlfkf 2 years ago | | |

No, you're wrong. OP said that on the instant that $1 dividend is paid, the stock price goes from $100 to $99. The extrapolation that next year the stock price will go from $99 to $98 is _your_ extrapolation, and wrong. The moment after the the dividend is paid the stock's price might go up, might go down. So on next dividend's payment it might go from 50 to 49 or from 200 to 199. The conclusion that this implies that that stock payment dividends always go down is also _your_ conclusion and also wrong.

> Wrong

You're not smart enough to be this arrogant.

MikeDelta 2 years ago | | |

Dividend paying stock has no limitations on growth compared to non div-paying stock. However when (cash) div-paying stock goes ex div, the stock price drops with that amount.

(Even reporters sometimes forget about that and try to find reasons what news caused a stock to drop instantly.)

quickthrowman 2 years ago | | |

> Dividend paying stocks don't decline in price.

They decrease in price by the amount of the dividend when the dividend is paid out (it’s actually when it goes ex-dividend, the payout may not happen for a few weeks). It’s extremely simple to understand.

The valuation of the company includes all cash, assets, debt, etc. If AAPL pays out a $1 per share dividend on 15.73B shares, they have $15.73B less cash. The valuation of the company drops by $1/share the instant after the dividend, and so does the share price.

The price action of AAPL after the dividend has been priced in has no relation to the dividend itself.

> Wrong. You claim that AAPL goes from $100 to $99 when it distributes $1. The only way that mean anything is if you also claim that the next year, AAPL hands out $1 and drops to $98.

A stock falling in value by the ex-dividend amount happens every single time a dividend is paid out.

roland35 2 years ago |

Dividends generally are not super useful to investors - you don't get to decide when they occur and when you pay tax. If you are in the accumulation phase of life this isn't really useful if you are going to be reinvesting the money anyways. They aren't bad, just not really worth the hype.

As always, bogleheads has a good writeup on dividends: https://www.bogleheads.org/wiki/Dividend

arbuge 2 years ago | |

Dividends may keep management disciplined, knowing they have to share some profits with shareholders. Companies without dividend payments that retain all their earnings may be more prone to destruction of shareholder value through empire building sprees by management.

nemo44x 2 years ago | |

Indeed, hence why buybacks are so popular. However keep in mind that there are qualified dividends as well which are taxed at the preferential long term capital gains rate. Still a tax though but rolling those back into the stock has good long term results.

I think congress was talking about taxing buybacks?

moneywoes 2 years ago | | |

What’s the distinction of these qualified dividends?

jjav 2 years ago | |

> you don't get to decide when they occur and when you pay tax

In a taxable account.

I keep high dividend stocks and ETFs in IRA accounts. For taxable accounts, I prefer stocks that are either growing or doing buybacks.

ricardobayes 2 years ago |

What is laid out here is called "yield chasing". Companies with extraorbitant dividend yield often end up losing much more on a 5Y timescale. There are very, very few companies that pay more than 3% and not end up losing money on the long run. (And even that is very bleak compared to just a vanilla S&P 500 yield). If there was a "magic bullet" high yield stock, everyone would flock and buy that one.

habosa 2 years ago |

Nice site! I agree, this information is generally pretty hard to find.

I hate that dividends have such disadvantageous tax treatment in America because I think dividends are the healthiest relationship between companies and investors. They try to make money and then give you some of it. As long as the dividend amount is healthy for both the investors and the company your interests are aligned.

Stock buybacks are such shenanigans in comparison: they make money and use it to inflate the value of their shares. Often they do this to hit certain price targets that help with executive compensation (or just image). And in order to actually get your profit you have to sell, which means you’re no longer an investor.

lxgr 2 years ago | |

> Stock buybacks are such shenanigans in comparison: they make money and use it to inflate the value of their shares.

Nothing is inflated if you think it through, since the market capitalization does not change.

By that logic, is issuing new stock (or even stock splits!) virtuous, since they both decrease the price per share?

manmal 2 years ago | |

I don’t think dividends are a great incentive as they encourage short term wins over long term thinking.

mystertea 2 years ago | | |

Even if you follow a dividend reinvesting strategy?

flakeoil 2 years ago | |

"And in order to actually get your profit you have to sell, which means you’re no longer an investor."

But that is basically because the company bought some shares for you. So if you sell to create your own kind of dividend makes no difference (other than maybe how taxes are handled and psychological).

mystertea 2 years ago | |

Thanks! I agree that conventional stocks can be a hassle to manage, and intuitively like an income-based approach.

ac29 2 years ago | |

> I hate that dividends have such disadvantageous tax treatment in America

What do you mean by this? Qualified dividends are taxed at long term capital gains rates, which is an enormous advantage compared to nearly all other forms of income.

memling 2 years ago | | |

Dividends are taxed twice: once as profit to the company issuing the dividend and once when the recipient receives it.

ravenstine 2 years ago | |

That's not all! Companies are allowed to use debt to buy back their stocks.

lacrimacida 2 years ago | | |

Nobody is questioning the fact that they’re allowed or not, it’s an unhealthy practice

akg_67 2 years ago |

IMO, you are very unlikely to monetize using anything other than advertisements. Just use google Adsense and focus on driving traffic to your site. A few things you can do:

* Expand the focus of the site to near-retiree/ retiree/ Fire and their need for regular monthly cash flow.

* Focus on portfolio construction using monthly income securities for different scenarios, economic cycles, etc. use criteria like low monthly cash flow variance, price stability, capital preservation etc.

* Add a blog/article section where you can post articles addressing your target audience.

* get inspiration from a few subreddit focusing on similar topics, for example /r/dividends, /r/qyldgang, /r/jepq, etc. Try to answer questions typically raised in such subreddits and provide tools on your site related to frequent queries made on such forums.

tndibona 2 years ago | |

I’ve been down the Adsense route and decided to get off of it. Aside from the fact that it will ruin the look of the site, and just turning you into a data mining point - The pay was abysmal for the work put into getting 10k users a month. It’s hard work trying to go subreddits and self promoting whilst risking getting banned.

I think this site is giving users some value that stock portals are not. I’d say keep shaping the product till you capture as much value from the big guys. Then hopefully a better idea for monetizing will crop up from this journey.

mystertea 2 years ago | | |

Appreciate the feedback grounded in personal experience, thanks! I was just looking into Adsense, and it does seem like a poor option for the reasons you mentioned: too much effort for too little return, not to mention the ugliness.

I'm glad you see some value in this! Based on the feedback I'm getting here, I have plans for some short-term wins that I can execute within the week, and beyond. I'm hopeful they can bare some fruit, or just add more value.

For now in the middle term, a few carefully positioned affiliate marketing links may be the way.

mystertea 2 years ago | |

Thanks for the constructive feedback here. Seems like this is the only way to go for something like this.

moneywoes 2 years ago | |

What about affiliate deals with motley fool type sites

mystertea 2 years ago | | |

I was thinking about this too -- affiliate marketing could be a good route.

bob1029 2 years ago |

When looking at investing in stocks (long term, growth), I weigh the dividend yield as a minuscule fraction of my overall decision. If you are buying "monthly dividend" stocks with hopes of securing a stable, long-term cashflow (i.e. by way of mostly just inspecting their historical yields), you are in for a really shitty ride.

The dividend is a noob test for an investor. Only in very targeted situations should you actually care about this number. Only when every other factor leads you to ??? should you glance at this figure and allow it to push you one way or the other. For example, "Should I buy ATT or VZ"? Trick question - You should buy both. Diversification is more important than dividend yield.

Holding something that yields 20% over the last 5 years sounds great, until the board (or more likely, market/competition forces) decide to light the whole thing on fire. Now, your entire original investment is up in smoke overnight. If you had been listening to the earnings calls, you might have developed some suspicions, but more likely than not your DD consists entirely of websites like this.

thunky 2 years ago | |

To add to this, if you think of a dividend as a forced sale of some of your shares (because that's effectively what it is), it doesn't look quite as appealing. A dividend is not free money.

That said, I do think that companies with consistent earnings and a solid track record of paying dividends are a different breed than a company than one that is driven by growth (often to their detriment). So it is worth paying attention to.

mystertea 2 years ago | |

Looking at your point regarding that earning call, it seems you're looking at this in light of a more traditional company and not an ETF/REIT/Leveraged fund. Forgive me if I'm wrong in that assumption. For conventional value investing, this is probably true, I'm no expert.

It does seem to me that there is room for a stock like this in one's portfolio though, as part of a larger strategy. Maybe a high yield leveraged fund is only a small portion of your stock, or you need to convert some of your assets to income for a few years.

sershe 2 years ago |

There are lots of people commenting about dividends not being useful or whatever, but I think they are not your target audience :)

And for your target audience, the people who like dividend investing (or liked it in low rate environment, like me) you appear to be missing a key feature... many/most dividend investors are looking for companies with history of uninterrupted payouts with no decreases in dividend (cuts) over at least 10+ years (probably longer now, basically including at least one recession and the more the better). So, # of years without dividend cuts is an interesting number. Another interesting number is yield vs history (for a company with stable payouts it may indicate whether price is high or low, assuming the stable payouts continue).

It's basically supposed to be /a bit/ bond-like :)

mystertea 2 years ago | |

Really good info, thanks. I'll add the dividend cut metric to my list. Not sure what you mean by yield vs history. I do have a chart comparing the yield to the stock price over time, but the window is only 4 years back. I'll try and expand that window, too.

sershe 2 years ago | | |

I may not be the best source on yield vs history, cause I learned about it by looking at stocks I bought that did not pan out. But yeah basically for a company with stable, decade(s) long payout, if yield looks low vs the long-term, the price may be too high. Of course, it can depend on future prospects, market conditions, etc. But in general all other things being equal it seems to hold for boring stocks.

tndibona 2 years ago |

I like the site. I’ve actually tried to use Schwab and Fidelity to locate long term stable dividend stocks but their search and filters are complex. Your site mostly lists funds so an option to filter by stock, or ETF, or managed fund would be helpful. Also a column that shows the expansion next to the abbreviated ticker name would be gold. Thanks for the effort

mystertea 2 years ago | |

Awesome, thanks for the feedback! That filter seems like a good idea--I'll work on implementing it. An expansion at larger view sizes should be doable!

mystertea 2 years ago | |

Just wanted to let you know that I added that feature. Hope it helps.

tndibona 2 years ago | | |

Great turn around time for feature work.

immy 2 years ago |

A tool like this would add value to a brokerage…but I don’t see them working with you when they already have the data and charting. Maybe see if you want to join the team building Mezzi (https://mezziapp.com)

oa335 2 years ago |

Seems like a decent start. As feedback, I’d suggest you take a look at quantumonline.com for an example of 1. The types of securities that income investors care about and 2. The type of information that income investors care about.

mystertea 2 years ago | |

Thanks for the feedback, this is exactly the sort of info I've been lacking, not being an expert in the space myself (only a journeyman, if that). I'll check this out.

johng 2 years ago |

I'm using the site now... very handy. I wish there were a way to filter it. For example, maybe I don't want to see covered calls.

What if I just wanted to see normal stocks (however you define that).

dmurray 2 years ago | |

Are there any "normal stocks" on the list? Everything I checked is an ETF, ETN or REIT, which may have structural or tax-based reasons to return cashflow to investors monthly.

Companies that actually make widgets or SaaSes or self-driving cars or other pillars of the 2023 economy seem to pay dividends either quarterly or not at all.

mystertea 2 years ago | | |

Yeah, it does seem that filtering for high yields and monthly payouts tends to return a lot of leveraged funds. Pulling more quarterly paying stocks may add more value-oriented companies. I'll consider this, as well as adding more filters to accommodate that.

mystertea 2 years ago | |

Good idea, I'll look into adding that feature. And thanks for the compliment.

tndibona 2 years ago |

I see a ton of comments saying dividends don’t matter. Dumb question: Isn’t the idea of common stock to partake in company ownership and collect the share of profits from said ownership ? Since when did this concept die down and the sole purpose of stock ownership became to speculate on future valuation in hopes of selling? As the owner of the company- I should want my fellow owners to stay invested right ?

anonymoushn 2 years ago |

Dividends are a tax-inefficient version of buybacks.

WJW 2 years ago | |

Only in the USA.

nayuki 2 years ago | | |

Dividends are tax-inefficient in Canada too.

SillyUsername 2 years ago |

Does this show stocks on all exchanges such as LSE?

mystertea 2 years ago | |

No, in the about section I mentioned only pulling US stocks.

ProxCoques 2 years ago | |

Doesn't look like it.

kmlx 2 years ago | |

rio tinto is missing, and they’re at ~9%

HumanReadable 2 years ago |

It's a well executed website, but there is no good reason for it to exist. You shouldn't be on a quest to find high yield dividend stocks in the first place.

Whether a stock pays dividends really shouldn't factor in to your decision as to whether to buy it. Any dividend a company pays out makes the company worth that much less. Whatever you stand to gain from the dividend, you stand to lose in the value of the stock you own.

When buying a stock the only thing that matters are its fundamentals. Ie. is the company's assets and future earning potential worth more than the current price of the stock to you? Unless you have information that the market doesn't, this is not a question whose answer you will reliably get right.

mystertea 2 years ago | |

Good points, especially for value investing. It also seems likely that this logic holds whenever analyzing a traditional company. Once again, I'd ask whether the same logic holds for the ETFs and leveraged funds that encompass most of the stocks on this site?

There may be other reasons not to invest in such a stock, but I seem to keep seeing value investors trying to compare apples to oranges.

amelius 2 years ago | |

Why does dividend exist then?

throwaway1777 2 years ago | | |

Because companies want to return profits to shareholders. Share buybacks are more common now but achieve the same thing. If the company is still growing it should be reinvesting in the business rather than throwing off cash but some stable (or declining) businesses have no good way to do so. That’s why dividends can be a red flag.

gtani 2 years ago |

There's paywalled sites and then there's the tools you get at Schwab, e-trade, Fidelity, TDA, (maybe Vanguard, their apps investment is lagging), which have detailed info about std dev total returns, Sharpe/sortino ratios, correlations, tax consequnces on a large universe of assets

- quarterly pays,

- preferreds

- laddered investment grade bond portfolios,

- asset and mortgaged-backed

- high yield bonds,

- REITs, hot sectors are cell towers, datacenters, p ersonal storage units

- LP, MLP (especially energy pipelines) royalty trusts

(and that's just US domestic... )

_________________

this vid (Ben Felix) about JEPI/XYLD type "covered call" etfs is instructive https://www.youtube.com/watch?v=YMLVdY8y8vM&t=312s

mystertea 2 years ago | |

True, the trading sites are more comprehensive, but I found them difficult to use, at least eTrade, with clunky and confusing interfaces that require a lot of knowledge to use effectively. Though, Maybe that last bit is a necessary component, and my site won't be useful for the experienced investor.

grepfru_it 2 years ago | | |

I disagree with this assessment. TdAmeritrade is very straight forward in the client and even easier on the website

gtani 2 years ago | | |

I don't want to discourage you but fair to assume that your users will have access to tools at brokers (or reasonably priced 3rd party like tradingview) that can do dividend portfolio backtesting/construction, I would need to see total returns/sigma of same.

roschdal 2 years ago |

Dividends are useless, because the stock falls in value relative to the dividend when it is paid.

tndibona 2 years ago |

Also, hey congrats on your product making HN front page. It isn’t easy

mystertea 2 years ago | |

Thanks!! I'm happy it made it.

NicoJuicy 2 years ago |

My sniff test failed:

Couldn't find Proximus ( https://finance.yahoo.com/quote/PROX.BR?p=PROX.BR&.tsrc=fin-... )

Since it has a 20% dividend based on it's current share price

Equally important as finding it , is that Belgium has 30% dividend tax.

VancouverMan 2 years ago | |

The site's "About" page says: "This site only tracks US-based dividend stocks with a monthly payout."

https://thedividendlist.com/about/

jldugger 2 years ago |

> to get feedback, in particular, about monetizing

Why should I care about high dividend yield? FINRA prohibits "selling the dividend"[1], and this project seems one step removed. Not illegal or necessarily deceptive, but seems closer to unsound than sound investing advice.

[1]: https://www.investopedia.com/terms/d/dividend-selling.asp