What is there to look for in a dividend stock? It’s important to remember that past dividends are not guarantees of payments in the future – if you want to be able to rely on a company’s dividend for an extended period of time, make sure the company can support it through its profitability or sources of liquidity. The current ratio, or current assets divided by current liabilities, is a popular gauge for a company’s liquidity, with ratios above 3 considered healthy.
Another consideration, as with any stock, is whether it is fairly priced. One idea is to consider a company’s ratio of levered free cash flow/enterprise value, with higher ratios indicating the possibility that the stock is undervalued. Levered free cash flow is the free cash flow after deducting interest payments on outstanding debt. Enterprise value is the sum of the firm’s value from all ownership sources: market cap, outstanding debt, and preferred shares.
Source: Kapitall
Related Articles:
- These 11 Dividend Stocks Could Make You Wealthy
- 13 Dividend Stocks Headed In The Right Direction
- 12 Industrial Strength Dividend Stocks
- 10 Financial Services Dividend Stocks To Boost Your Yield
- Building Yield: 15 Consumer Goods Dividend Stocks
Highly Undervalued Dividend Stocks
Posted by D4L | Saturday, February 11, 2012 | ArticleLinks | 0 comments »________________________________________________________________
Subscribe to:
Post Comments (Atom)
~
Popular Posts Last 30 Days
-
If you're worried about inflation rearing its ugly head next year, you should probably worry about more likely catastrophes, such as bei...
-
As a relatively new blogger, the one thing that has stood out in my mind is the number of Canadian bloggers in the areas that I am most inte...
-
When a company pays a dividend, it's a good thing for shareholders. When a company consistently pays a dividend every quarter, it's ...
-
If you've been holding back from investing in your future just because you don't have a lot of extra cash to spare, I've got gre...
-
If you are looking for high-yield dividend stocks that can beat the market, you might want to check out these three companies. They all have...
-
If you are here to build a portfolio that thrives in all seasons, consider dividend stocks. They can generate steady returns and provide sta...
-
One way to achieve financial freedom is to create passive income, or income that does not depend on your active involvement beyond a certain...
-
Since 1926, dividends have contributed approximately 32% of the total return for the S&P 500, while capital appreciations have contribut...
-
My top financial goal is to eventually become financially independent. The foundation of my strategy is to make investments that produce an ...
-
The company's remarkable consistency and low-risk business model make it a "first-choice investment opportunity," according to...
0 comments
Post a Comment
Post a Comment
Note: Only a member of this blog may post a comment.