Here's How to Choose Winning Dividend Stocks

Posted by D4L | Wednesday, December 12, 2012 | | 0 comments »

The low, low interest rates of the past several years have placed a premium and emphasis on dividend paying stocks. While this is sound thinking, it’s incomplete. For all but the most unique circumstances, investors want to focus on dividend paying stocks with a track record of consistently increasing their dividend.

Dividend payout ratio [is] an important variable in assessing whether or not a company can continue to increase dividend payments to shareholders. The payout ratio is defined as Dividend Per Share ÷ Earnings Per Share. The higher the ratio, the less room a company has to keep the dividend constant or increasing in lean years, simply by increasing the percent of net income that is allocated to shareholders. The payout ratio is not a silver bullet for assessing dividend-paying ability. For instance, companies with high amounts of depreciation will present a distorted picture, as cash flow per share is likely to be higher than earnings per share.

Source: Minyanville

Related Articles:
- Spanning the World For The Best Dividend Stocks
- The Secret Ingredient of Dividend Growth Stocks
- 9 High-Yield Stocks With A Low Price To Book
- Defined-Benefit Pension Plus Dividend Stocks For A Prosperous Retirement
- 5 Dividend Stocks To Buy And Hold, Not Buy And Forget

Click here to have future posts delivered to you for free!

_____________________________________________________________________

0 comments

Post a Comment

~

Latest From Dividend Growth Stocks

Popular Posts Last 30 Days