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Investment 101

To first understand dividends, you must understand that not all companies pay stock dividends. Whether it is that they use the profits from their stock as capital for acquiring other companies, or for redistribution amongst its other corporate divisions.

The two primary functions that must be considered when purchasing stock for the purpose of dividend investment is the actual history of performance I.E. quarterly earnings, yearly earnings, and the price to earnings ratio (known as P/E) all these things should be used when deciding on stock for dividend investment purposes.

Some of these stocks with a history of high dividends and performance are, 

                                                                Div    p/e ratio

SID Companhia Siderurgica Nacional (ADR) 3.05      18.9

CLP Colonial Properties Trust                     2.70        6.1

AIV Apartment Investment and Management 2.40       5.8

Some Wall Street Brokers consider the Euro-dollar a worthwhile investment. Since its inception in 1999, the Euro has fluctuated. The first years of the euro brought with it lower value to the American dollar, but in the spring of 2002 the Euro Dollar has increasingly gained value to the American dollar. Eventually the Euro surpassed the American dollar in value, making it a very lucrative investment with solid growth potential.

Another speculative market is stocks, while highly volatile these can yield high returns. One such firm is Citigroup which administrates Citibank, Citibank credit, and several small banking and mortgage institutions.

Speculation on Citigroup’s desire to break into new markets is plentiful. In 2001 Citigroup bought Mexico's Grupo Financiero Banamex-Accival for 12.1 billion dollars, expanding its international front. Deutsche Bank AG was recently rumored to be in negotiations with Citigroup for possible acquisition, which was considered the catalyst for a 7.3% rise in its stock price. Many on Wall Street consider this stock to be somewhat shaky, because as the economy continues to stagnate, a risk of default from its large credit card operations is considered imminent.

In Nov. of 2004 Phil Knight the founder of The Nike Corporation stepped down and relinquished control of the company he started from the trunk of his car, causing the stock price to drop 3%. But a solid corporate plan and a dedicated consumer base brought their earnings back within days. While experiencing a 52 week low of $68.61 their high is $92.43 and trading at this time is in the $84.46 range. Nike posted a 3rd quarter profit of 15% which yielded a $1.16 dividend, but was a lower than anticipated gain. Nike still controls the largest piece of the shoe market and there are no expectations for anyone to surpass them any time soon.

Lowes originally offered as a public stock on October 10 1961, has continued to grow in both earnings and facilities. Their dedication to steady growth and customer service has served to help build a vast network of stores that are as profitable now as they were 1961. February 24 brought an equity offering of an additional 62 million shares of stock, available for public purchase. Lowes 52 week low is $45.90 and their 52 week high is $67.01 with shares trading at $65.80

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