Explore using dividend stocks and ETFs as a potential source of income
Crunch the numbers with the Dividend Income Estimator, a tool designed to help you evaluate different dividend stocks and ETFs
Create a watchlist to help you monitor and track the performance of your investments
Have you ever wondered how modifying your mix of dividend stocks and dividend-paying funds (exchange-traded funds, exchange-traded notes, or mutual funds) might affect your income over the next 12 months? Or maybe you’re brand new to dividend stocks and want to see how adding them to your portfolio could be a source of income? The Income Estimator tool can help you find the answers you’re looking for.
A dividend is distributed to shareholders in the form of cash or stock. We’ll focus on income here, so we’ll not be discussing stock dividends, just cash dividends. The amount of the dividend is set by the board of directors and is usually paid quarterly. Dividends are typically paid by companies with a long history of profitability, so you don’t see as many IPOs or high-growth stocks with dividends.
The Income Estimator tool shows you various data points for dividend stocks, ETFs, ETNs, and mutual funds, such as:
- Dividend yieldDividend per shareDividend frequencyEstimated pay datesEstimated 12-month income
How the income estimator tool calculates dividend stocks, ETFs, & mutual funds
The tool also lets you look back at a company’s historical dividend payments to see their dividend history—whether positive or negative—in dividend growth.
To access the estimator, enter the symbol in the Search box on the home page of your TD Ameritrade account. This will bring up the stock’s or fund’s profile page. From here, select Income Estimator (see figure 1).
FIGURE 1: Income Estimator on tdameritrade.com. To use the tool, log in to your account at tdameritrade.com, type in a symbol, and select Income Estimator. Source: TD Ameritrade. For illustrative purposes only. Past performance does not guarantee future results.
After you select the Income Estimator link, re-type the symbol in the Search box on the tool to access the income estimates. You now have the choice to either pull in additional individual stocks or even one of your previously created watchlists. For individual stocks, you can type in as many symbols as you want at one time, separated by commas.
After selecting Go, you’ll see the estimated 12-month income for the stock(s) you entered in bold in the left corner as well as a chart showing the estimated date and amount of the individual payments (see figure 2). Dividend data is updated every morning, so the estimates stay current. Have one or more of your stocks not paid a dividend recently? You’ll see a yellow indicator ribbon.
Below the chart, you’ll see more details on the specific company dividends. The tool automatically defaults to 100 shares per holding, but you can modify the quantity to fit your portfolio or estimated allocations. You can use the Add button to add stocks to the mix, or you can remove stocks by selecting the small X at the far right of a stock’s line item.
FIGURE 2: Using the Income Estimator tool. See estimated income, dividend yield, and other data. Source: TD Ameritrade. For illustrative purposes only. Past performance does not guarantee future results.
Once you have your list set, use the drop-down menu to toggle among All, Stocks only, ETFs & ETNs only, and Mutual Funds only.
One nice feature for those new to dividend investing is the Finding Dividend Paying Stocks section below the estimator. By selecting Predefined Screen: High Dividend Yield, you’ll see a list of stocks with the highest dividend-to-price ratio. This list can be sorted by column headings, and you can save individual stocks to your own personal watchlist by selecting the checkboxes next to each and then selecting Add to watchlist at the bottom of the page.
The Income Estimator is a highly flexible and easy-to-use tool that can give you powerful insights into how dividends can work within your portfolio. Whether you’re a dividend pro or new to the game, try the Income Estimator and see what it can do for your investment planning.
Income Estimator – Explore potential dividend income