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The Little Book of Big Dividends: A Safe Formula for Guaranteed Returns Hardcover – February 8, 2010

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Frequently Bought Together

The Little Book of Big Dividends: A Safe Formula for Guaranteed Returns + The Ultimate Dividend Playbook: Income, Insight and Independence for Today's Investor + Get Rich with Dividends: A Proven System for Earning Double-Digit Returns
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Product Details

  • Hardcover: 208 pages
  • Publisher: Wiley; 1 edition (February 8, 2010)
  • Language: English
  • ISBN-10: 0470567996
  • ISBN-13: 978-0470567999
  • Product Dimensions: 7.1 x 5.9 x 0.8 inches
  • Shipping Weight: 10.4 ounces (View shipping rates and policies)
  • Average Customer Review: 4.0 out of 5 stars  See all reviews (21 customer reviews)
  • Amazon Best Sellers Rank: #60,755 in Books (See Top 100 in Books)

Editorial Reviews Review

Everyone needs to invest, but where do you invest during bear markets?

The massive stock declines over the past year have eroded savings, but this doesn't mean you should stuff your money under a mattress. It needs to be put to work getting some return so that it will grow.

Smart investors will turn to high dividend paying stocks to get a stable and growing stream of income. Dividend investing-that provides an income beyond any gain in the share price-may be the investor's best weapon. Dividends are safe, largely reliable, and maybe at the their cheapest levels in many years. While the best paying dividend stocks of recent years, such as financials, took a huge beating in 2008, opportunities will abound in 2010 and beyond-if you know where to look.

In The Little Book of Big Dividends, dividend stock expert Chuck Carlson presents an action plan for dividend-hungry investors. You'll learn about the pitfalls, how to find the opportunities, and will learn how to construct a portfolio that generates big, safe dividends easily through the BSD (Big, Safe Dividends) formula. If you're a bit adventurous, Carlson has you covered, and will teach you how to find big, safe dividends in foreign stocks, preferred stocks, ETFs, real estate investment trusts, and more.

  • Contains the simple tools, strategies, and recommendations for finding big, safe dividends
  • Helps you put a complete portfolio together that pays dividends every month
  • Show you the top dividend paying stocks with their dividend payment dates

It doesn't get any easier than this, and in these turbulent times, you can't afford to ignore the power of dividends. Read The Little Book of Big Dividends and gain a better perspective of how you can protect yourself for the future.

Tips for Successful Dividend Investing
Amazon-exclsuive content from author Charles B. Carlson

1. Dividends matter. Nearly half of the stock market’s long-term total return comes from dividends.

2. No free money. Stock prices adjust downward for dividend payments. Don’t let anyone tell you differently.

3. Bye-bye dividend. A company that isn’t making a profit is a company that isn’t going to be paying a dividend for long.

4. Buy before the ex. Want the dividend? Buy the stock before the ex-dividend date.

5. Too much of a “good” thing can kill you. If a stock yields more than 3 percentage points above its peers and more than five times the S&P 500 yield, just say no.

6. It pays to use this ratio. Payout ratio is the single more powerful tool for assessing the health of a company’s dividend. Ignore it at your own peril.

7. Don’t pick one without the other. Buy stocks that score well on dividend criteria and investment criteria. Remember: the best stocks to own are those with the best total-return potential.

8. All shapes and sizes welcome. When buying big, safe dividend stocks, make sure to include large, midsized, and small stocks. You’ll improve portfolio diversification.

9. No height requirement. Young investors can start building serious wealth via direct-purchase plans. All it takes is $50 to buy attractive dividend payers.

10. Hedge me if you can. Higher dividends are a great inflation hedge.

11. Stay in sync. Sync cash flows with bills by matching dividend-payment schedules with monthly expenses.

12. Have a good eye on the plate. Don’t be swinging at every stock with a super-high yield. Be selective, focusing on those with good BSD and Quadrix scores.

13. Discount shopping. Reinvesting dividends assures that you’ll buy stocks when they go on sale.

14. Age-old wisdom. Subtract your age from 110, and that is a benchmark for determining the appropriate percentage of stock in your portfolio.

Amazon Exclusive: Charles B. Carlson’s Recipe for Wealth

Now is a great time to be a dividend investor. Really. It’s an understatement to say that 2009 was a lousy year for dividends. In fact, according to Standard & Poor’s, it was the worst year ever. Dividend cuts resulted in lost shareholder income of more than $58 billion in 2009. More than 800 companies cut or omitted their dividend payments during the year, up from 606 in 2008 and more than seven times the number of dividend cuts and omissions in 2007. Coming on the heels of such dividend carnage, what I’m about to say may shock you, but I believe it to be true: Today may be the best time in nearly three decades to be a dividend investor.

Why do I think there are tremendous opportunities in dividend-paying stocks? Partly because of the massacre of the last few years. A stock’s yield is determined by two things—the dividend and the stock price. If a stock price declines, its yield increases (provided, of course, that the company continues to pay the dividend). When stocks were crushed in 2008 and early 2009, the huge price declines lifted dividend yields on quality stocks to levels that, in many cases, I have not seen since I started in this business in 1982. Because stocks fell so much in 2008 and early 2009, prices reached ridiculously low levels. Even with the market’s rally since March 2009, it is not uncommon to see stocks trading below prices they fetched a decade ago.

The bottom line is that dividend-paying stocks are as attractive today as they have been in nearly 30 years, especially when you compare dividend yields to the miniscule interest rates found on cash and other money-market instruments.

What is the best way for an investor to take advantage of these opportunities in dividend-paying stocks?

If you want the recipe for getting rich with dividend-paying stocks, here it is:

1) Find stocks with above-average appreciation potential and safe and growing dividends.
2) Buy them at attractive prices.
3) Reinvest the dividends.

It’s a recipe I’ve followed in my monthly newsletter on dividends and dividend reinvesting, DRIP Investor, which I’ve been writing for nearly two decades.

Partly because I believe the timing has never been better for dividend-paying stocks – and partly to dispel many of the myths about dividend investing I see espoused by so-called “experts” – I decided to write a book on dividend investing, The Little Book of Big Dividends.

My book is a blueprint for successful dividend investing. In the book, I walk you through the basics—what a dividend is (and isn’t); why, how, and when companies pay dividends; and why some companies pay big dividends while others pay no dividends at all. I also discuss the importance of size and safety of dividends when considering dividend-paying stocks, as well as the ability to buy attractive dividend-paying stocks directly via DRIPs and direct-purchase plans. I also provide you with a simple yet powerful formula for finding what I call “Big, Safe Dividends” (BSDs). My “BSD Formula” takes into account factors most critical to the safety and growth potential of a company’s dividend and can be used by any investor to find attractive dividend stocks.

Making market predictions is typically a fool’s errand. However, I’m pretty sure stocks won’t be as strong in 2010 as they were in 2009 nor as weak as they were in 2008. My guess is that you will see a more “grind-it-out” type market environment in 2010, one in which investors weigh risk as much as return and play more defense. In such an environment, dividend-paying stocks are especially attractive. However, you’ll need a guide to steer you to the best dividend investments and away from worst. Consider The Little Book of Big Dividends your personal financial “GPS,” pointing you to dividend riches in 2010 and beyond.


‘…presents an action plan for dividend-hungry investors…’  (The, September 2010).

"This is a book aimed at serious investors who want to shore up their portfolios with a time-tested stock asset. Carlso is a clear writer [and] makes his case very well for the power of dividends.".

“Provides excellent analysis. . . should be an important component of a private wealth adviser’s discussion with clients about sources of long-term investment return and the critical importance of reinvestment in building wealth.  Carlson addresses portfolio diversification and risk management in an accessible way.  Readers will appreciate the manner in which he ‘names names’ to paint a clear picture of how excess returns can be achieved through a simple and time-tested investment formula. He also underscores the need to supplement selection formulas with fundamental research in order to make optimal investment decisions.” (Financial Analysts Journal)

More About the Author

Charles B. Carlson, CFA,is CEO of Horizon Investment Services LLC, an investment advisory and money-management company. He is also CEO of Horizon Publishing, a publisher of investment newsletters. Horizon's flagship publication, Dow Theory Forecasts, has been published weekly since 1946 and is one of the oldest investment newsletters in the country. Carlson is a bestselling author and is regularly quoted in the Wall Street Journal, Barron's, and Money magazine, and is a frequent guest on CNBC, Bloomberg TV and radio, and CNN.

Customer Reviews

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I highly recommend this book to anyone who is interested in investing.
Michael L. Wolff
This book provides much good insight into the correct strategy for investing into individual stocks.
As a part of your portfolio...make sure you buy quality dividend stocks.
Wandering boy

Most Helpful Customer Reviews

42 of 43 people found the following review helpful By Benjamin Phua on July 30, 2010
Format: Hardcover
As a young investment manager I like readable books that I can read in the evenings that can explain concepts clearly and simplify things where appropriate as opposed to the textbooks I'm familiar with which are heavy on theory but weak on application. This book is such a book but with limitations.

As an investor who does not believe in relying on other peoples' models unless I can actually see what goes into a model, this book is a good starting place for understanding the fundamentals of dividend centric investment strategies for your own creative thinking process.

BUT do realise that an important aspect of Mr. Carlson's valuation methodology lies in his Quadrix score generation which is obviously a complex multi level model which he explains only at the simplest level, if you want to use Carlson's formula for picking dividend stocks, you MUST rely on the assumption that his Quadrix model will continue to beat the market based on the evidence that he has presented. Then you MUST only pick from the free data available at his website or PAY for the Quadrix data or RELY on his stock picks.

Personally, I feel this book is worth the money I paid for it just because it gives me a basic understanding into his methodology as well as a updated (weekly) list of stocks he picks using his Quadrix method. I intend to look into his stock picks but I will use my own analysis, relying on black box models always gives me the creeps...
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14 of 14 people found the following review helpful By James Ryan on June 12, 2011
Format: Hardcover
With the havoc the recent down market has wreaked on people's retirement plans, I've become very interested in dividend paying stocks. If carefully selected, dividend stocks have the potential to provide a steady stream of income regardless of the fluctuations of the stock's price. Notice I said carefully - as stocks can cut or even stop dividend payments at any time. But if the stocks are selected based on a strict set of criteria that is setup to minimize the chance of cutting the dividend, great recession proof wealth can be created over time.

The concepts covered in this book are mostly basic, but I would have avoided some mistakes if I had read it BEFORE I attempted to invest in dividend paying stocks. If you're an experienced dividend investor, this book is probably a bit too basic for you. The one exception is if you are interested in utilizing a formula in order to pick stocks based on consistent pre-defined criteria. The book provides a basic and an advanced version of it's Big Safe Dividend (BSD) formula. The two formulas vary based the ease of use along with the number of variables used.

The author takes the BSD formula one step further and provides a completely free website that calculates the parameters for you. So all you have to do is apply the criteria explained in the book, and you should be able to pick winning stocks over the long term. The website is updated weekly, and you can go check out the recommended dividend stocks at any time.The formulas were backtested all the way back to 1994, and they consistently beat the market by at least 4 percentage points on an annual basis. The advanced BSD performed even better.

Note that you should do your own due diligence and not completely rely on a formula to make your decisions.
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19 of 24 people found the following review helpful By Quoizimodo on March 1, 2010
Format: Hardcover Verified Purchase
Book is excellent. Basically, you purchase a stock and forget it. You will ride the ups and downs of the market with it. However, for short term and intermediate trader; you will be unable to capture the volatility of the equity you own and trade in the direction of the market. Easier to read than your Sunday paper. I therefore recommend this book for beginners in the financial market.
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3 of 3 people found the following review helpful By Gisela Hippolt-Squair on July 10, 2011
Format: Hardcover
A good and easy-to-understand overview of the value of dividend stocks and how to select them. He also discusses DRIPs and other strategies. As with other Little Books, the author has set up a website using his formula to select quality, dividend stocks. This website is free [...]. It's a useful resource to quickly see yield and other stats for S&P stocks without doing the work yourself.
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2 of 2 people found the following review helpful By Amazon Customer on February 16, 2013
Format: Kindle Edition Verified Purchase
Every cycle starts and ends with dividends and keeping to the basics can relieve you from the headache of lossing money.
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20 of 30 people found the following review helpful By PK on May 6, 2010
Format: Hardcover
The book is meant for absolute newbies. It does not contain any useful discussion for seasoned investors. The book actually argues that investors should not look to buy and own high dividend stocks! (instead just own stocks spitted out by the BSD formula given in the book). The explanation of the BSD formula itself is very superficial.
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By Kindle Customer on May 8, 2014
Format: Hardcover Verified Purchase
I read this book and thought it had useful information. I gave it as a gift to my dear grandson
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Format: Hardcover Verified Purchase
Short and sweet concepts, easily understood. It's all about being patient and consistency when it comes to wealth building, something most people lacked given all the get rich quick schemes around nowadays.
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