I see. Thanks for the book recommendation. In the same spirit, I liked and recommend "the little book of big dividends", and the blog
www.dividendgrowthinvestor.com In your situation, probably is best to build up the stash in an index and maybe transfer to a great company like JNJ or PG after you've accumulated a healthy sized stash to minimize your expens in the transaction. Provided it's at a reasonable price of course. It's my opinion, that you don't have to be a super smart analyst if you are investing in the biggest companies with a proven track record...basic knowledge will do. In the grand scheme of things...as an investor, your goal should be to buy profits for the cheapest price. There are certainly some metrics you could get to know for dividend companies like monitoring a healthy dividend pay out ratio, return on equity, debt, etc...but knowing fundamentally, most great companies pay out dividends because they accumulate loads of cash and they choose to payout to investors after they've utililzed the amount of profits needed to grow the business. I usually only sell when a business cuts there dividend...which means they're in financial trouble.
I just want to point out a big company like JNJ. Between 2000 and 2010 (Americas lost decade), sales rose from $29.172 billion to $61.587 billion, or 111%. During that same decade, net earnings grew from $4.764 billion to $13.334 billion, an increase of nearly 180%. That means profits grew faster than sales at a rate of 69% for the decade.
On a per share basis, the figure is more impressive because diluted shares outstanding have fallen from 3,075.2 billion to 2,788.8 billion, a reduction of 286.4 million shares, or 9.3% since the beginning of the decade. Dividends per share grew from 62¢ to $2.11, representing a 340% increase. Book value per share has expanded from $6.82 per share to $20.66 per share, an increase of 203%.
All in all, it’s been a great decade for Johnson & Johnson. The stock trounced the S&P 500 and would have done even better except that ten years ago, shares ended the year at $52.53 on earnings per share of $1.55 for a p/e of 33.89 and an earnings yield of 2.95%. At the same time, you could have bought an intermediate United States Treasury bond with a 5.07% yield.
Last thought...do you have access to sharebuilder in Scottland? They only charge $9 a trade, or if you choose to set up automatic investments the transactions go down to $4 per trade. Right now I've negotiated free trades for 9 months...so I'm taking advantage pretty heavily right now. Good luck to you.