We recently held a roundtable on the best dividend stocks for beginners.
It was well received, so senior analyst Anand Chokkavelu sat down with James Early, the lead advisor of the Motley Fool's dividend investing service, Income Investor, to dig further.
Asked for the biggest mistake beginning dividend investors make, James pointed to ignoring the quality of the dividend. Beginners see a high dividend yield and jump in, but more seasoned investors look to make sure the dividend is sustainable. The first step in that process is looking at the payout ratio, or dividends paid vs. net income.
Two dividends that James believes are 1) sustainable and 2) suitable for beginning investors are Johnson & Johnson
Watch the video here:
James Early owns shares of Johnson & Johnson and Waste Management. Anand Chokkavelu doesn't own shares in any company mentioned. Waste Management is a Motley Fool Inside Value recommendation. Johnson & Johnson and Waste Management are Motley Fool Income Investor recommendations. Motley Fool Options has recommended buying calls on Johnson & Johnson. The Motley Fool's disclosure policy gets camera-shy.