How to play dividend stocks

I read an article from Tiger_Academy, if you need to live on dividends...

@Tiger_Academy 

I would like to share my opinion regarding dividend stock.

First what is dividend stock?

Dividend stock needs meet two conditions.

1.     Dividend yield must be double then 10 years Government bond yield, at least 4%.

2.     Dividend stock business model is low ‘β’ , that means business profits was stable and easily to forecast.

Profits was stable and easy to forecast. Let me give a few samples for dividend stock.

$P7VU(P7VU.SI)$ $和记港口信托(NS8U.SI)$ 

Port business almost transparent. You can read news to guess how the port operation is from import and export data. It will not change much year on year unless economy crisis happened.

$上海实业环境(BHK.SI)$ $中国光大水务有限公司(U9E.SI)$ 

The wastewater treatment plant, build water treatment facility and collect operation income every year. I can close eyes guess the next financial report is 5% increase year on year. The company is matured, many facilities are in operation. New building plant expense is under control, it will not affect cash flow.

$腾飞房地产信托(A17U.SI)$ 

Diversified Reits are also dividend stock. And big bank with stable performance and high dividend are dividend stock.

I don't agree oil stocks were dividend stocks. We can not forcast oil price.

What is the strategy to play dividend stocks. Dividend stocks investor must be patient and not greedy.

Here is the chart of HPH over a year, almost a year the price was not changed, the fair value is 0.305 at most of time. There was a good chance, 3 weeks window on Sep 2021, the price was as low as 0.26.

In general fair, I used the FV 0.305 as investment cost, the expected dividend yield was 8%,  before the ex-dividend date, the price was hit to 0.35 already. More than 10% profit, after 0.335, you can consider selling some stocks batch by batch. No need empty stock, but it is necessary to sell out  some portion when stock price  rise up and dividend yield drop. If no investors were keens on this stock, price stable, just hold and collect dividend. 

Dividend stocks, it is not necessary to collect dividend. Sell high at ex-dividend and buy low after record date and cooled down. Remeber it is low 'β’. Be patient and not greedy. 

@TigerStars