Ford Motor Company (F)

[GreenBrickRoad]

So, the answer to your question of dividends typically decreasing with pps is yes, but that's correlation and not causation. PPS and dividends are both tied to earnings, that's the key. Declining earnings put pressure on the dividend and the PPS.

A mature company such as F paying a dividend rate of 15% ($0.15 per qtr at $4) would be gobbled up so quickly, you'd never have the chance to buy in. This is, of course, under the assumption that the dividends have a reasonable likelihood of longer-term sustainability. Usually if a company is paying a dividend between 5-10% annually, there's some higher-risk project in the works, such as new technology and emerging markets.

My larger divy stocks are Royal Dutch Shell and Las Vegas Sands for example, which were considered somewhat "riskier" plays when I got in. I bought into both of these over a year ago at prices well below $40. They're both hovering around mid-$50, and I've been collecting about 9% on RDS and 7.2% on LVS (based on my buy in price) ever since. As for Ford? I'm taking a loss with it in $11's based on price alone. But add up the dividends, including the 6% rate they paid last year (accounting for the special div), and I'm still in the green.

Hope that helps.