Dividend stocks have many benefits. One of them is the empirical evidence linking payout with higher earnings growth which in turn translates into stronger returns. In addition, higher-yielding stocks tend to be less volatile in uncertain markets like today. However, when I look for dividend stock ideas I am not just looking for a high yield, I am looking for companies whose dividend is steadily growing and who are not spending all their money on their dividends as they also need to growth their business!
In order to identify dividend growth candidates, I usually start by looking for companies with the following characteristics:
- Dividend yield in excess of 2%: I’m investing in dividend stocks to get some yield!
- Payout ratio below 50% to make sure the company has enough money to reinvest in growth.
- Positive free cash flow: to make sure the company has the cash to continue paying its dividends in the short term.
- A debt to equity ratio of less than 50% to avoid companies with too much leverage.
- Growing year over year dividends for the last seven years.
- A dividend growth rate of 5% on average or more per year over the last seven years.
Source: Guru Focus
Related Articles:
- Three Dividend Stocks With A Perfect Risk Score
- Protecting Your Dollars With Foreign Currency
- How To Maximize Your Dividend Stocks' Earnings
- High Yield, High Risk Dividend Stocks
- How Much Money Will You Need For Retirement?
Attractive Dividend Growth Stocks
Posted by D4L | Tuesday, December 20, 2011 | ArticleLinks | 0 comments »________________________________________________________________
Subscribe to:
Post Comments (Atom)
~
Popular Posts Last 30 Days
-
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...
-
The best dividend stocks have one thing in common: resiliency. They can continue increasing their dividends even in the harshest economic en...
-
Dividends and diversification -- those two things can help you achieve a comfortable retirement when combined with the income you will recei...
-
Investors wanting to enjoy steady and consistent income should consider dividend aristocrats. In fact, even in these chaotic times, dividend...
-
A good dividend stock has more than a high yield. Dividends need to be supported by cash flow, and cash flow depends on the long-term streng...
-
Higher dividend yields often imply that the underlying company paying the dividend has a higher risk profile. However, that's not always...
-
It's hard to beat a sustainable, high-yield dividend paired with a beaten-down valuation. The best dividend stocks offer high yields and...
-
When hunting for discounted investments, one excellent starting point is to look for businesses with dividend yields trading above their fiv...
-
Strange but true: seniors fear death less than running out of money in retirement. And unfortunately, even retirees who have built a nest eg...
-
BDCs can be excellent investment options for those seeking high returns, particularly when acquired at favorable valuations and supported by...
0 comments
Post a Comment
Post a Comment
Note: Only a member of this blog may post a comment.