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How do you identify the best paying dividend stocks?

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Quick Answer

To determine the stocks paying the highest dividend, analyze a stock's dividend yield and dividend rate, notes Joshua Mrozinski for the Houston Chronicle. These figures are available on the official websites of major stock indices such as the Nasdaq.

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A higher dividend yield indicates a company pays out more money to investors, explains Mrozinski. Investors should be cautious, however, as a higher dividend yield also means the company is not reinvesting earnings into the business. Investors can also use the dividend rate metric to determine the dividend amount a stock is issuing over a particular period.

The Nasdaq is a major market index used to gauge the health of the American economy, according to finance expert Paula Pant for About.com. This market index is comprised primarily of technology and banking stocks. As of 2015, over 3,000 companies are included in the Nasdaq index. The official Nasdaq website contains numerous metrics, including dividend yields and dividend rates. A visitor can filter and sort the data as necessary to determine which stocks to purchase. Visitors can also view the last dividend payment date and the current stock price of the respective company. The provided data is updated in real-time during open stock market hours.

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