What are the Differences Between Mutual Funds and ETFs?

This year, we launched our financial education series.  The purpose was to educate investors on various aspects of dividend investing or just investing in general.  Some articles have been as fundamental as “What is a Dividend?”  while some articles took a deeper dive into a topic, such as “What is a REIT and How Are Dividends From a REIT Taxed?”   Today’s article will take a step out of the dividend specific topic and explain the differences between mutual funds and ETFs.  Both types of investments are important diversification options and are similar (but with some key differences).   And of course, as you would expect, there will be a dividend twist at some point in this article!  Let’s start peeling back the layers!

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What is a REIT and How Are Dividends Received from a REIT Taxed?

This year, we started a financial education series geared towards educating beginning investors and more specifically, beginning dividend growth investors.  Our first two articles explain what a dividend is and the dividend payout ratio (and how to calculate it). In this article, we will take a deeper dive into one specific type of holding that can be found in many dividend investors’ portfolio.  This holding typically pays a higher dividend, which is why dividend investors are always on the lookout for a great one. If you’re looking into becoming a dividend growth investor, you better get used to reading these four letters…REIT. Here is a deeper dive into what a REIT is and how dividends received from a REIT is taxed.

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Dividend Payout Ratio: Explaining the Most Important Metric

Dividend Payout Ratio, Calculating the Dividend Payout Ratio

In a recent article, Lanny broke down what a dividend is and highlighted what is so great about receiving a dividend.   When I first started learning about dividend investing, there were a lot of articles and emphasis on assessing a company’s dividend payout ratio.  So I thought I would take some time today, provide a definition for the payout ratio, show how to calculate the metric, and some other details/tricks of the trade that we have picked up over the years as we continue to invest in dividend growth stocks.

Read:  The 3 Metrics of our dividend stock screener, which includes the dividend payout ratio!

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