You can't spend earnings. At first glance, this probably seems like an odd statement, possibly even incorrect. However, it is not only correct, but an important investing axiom for any type of investor. Let me explain. Earnings are that which is derived from the exchange of a product, service or other, less associated expenses. Ultimately, it is our desire that earnings are converted to something that can be spent, such as cash. Cash flow is what ultimately drives the value of any financial asset.
Below are several select companies that recently decided deliver more cash to their shareholders through increased dividends:
After running these companies through my D4L-PreScreen.xls model, ACO with a NPV of MMA Differential of $5,514 is worth a second look. I have added it to my list for a more detailed evaluation.
Disclosure: No position in any of the aforementioned stocks.
(Photo: sanja gjenero)
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Dividend Stocks In the News: August 23, 2008
Posted by D4L | Saturday, August 23, 2008 | commentary | 0 comments »________________________________________________________________
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