Top dividend paying stocks

First, don't buy stocks. Buy stock index mutual funds like Vanguard S&P 500 Index fund. But maybe you already own stocks or have some "mad money" to invest and you want to get paid to do so by receiving a nice dividend.

Don't let the dividend yield be your only reason for buying a stock. The dividend yield is a simple calculation of the expected annual dividend payment of a stock divided by its current price. So if stock XYZ is trading for $10 and pays a 50 cent dividend it's dividend yield is 5% (.50/10).

But sometimes a stock will offer an outrageous dividend likely due to a drop in the stock price rather than a large dividend increase. So let's say that stock XYZ has fallen by half so that now instead of $10 it trades for $5. That 50 cent dividend now represents a 10% yield (.50/5). That looks great but if the stock has fallen so much it's likely due to reasons which could lead the company to cut or eliminate the dividend.

Do your research first. Here's a place to start: Dividend yield