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
-
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...
-
In short, dividend-bearing stocks are one of the smartest approaches stock investors have available currently. The same is true in strong ec...
-
If your growth-investing days are over (or nearly so) and you're more interested in steady income, start your search with all-weather st...
-
Even in the current inflationary environment, where stocks across a wide variety of sectors are trading down, companies with a favorable his...
-
Finding cheap dividend stocks is critical for another reason. By the time the Federal Reserve meets for the second time in 2023, the central...
-
Investing in passive income can allow you to make money with minimal portfolio management. There are many types of investments to make passi...
-
Many companies make very predictable fixed dividend payments each quarter. When they do, their investors have a pretty good idea of how much...
-
As 2022 wraps up, many investors are likely looking for ways to position their portfolio for more macroeconomic uncertainty next year. After...
-
Linked here is a detailed quantitative analysis of Chevron Corporation (CVX). Below are some highlights from the above linked analysis: Comp...
-
Warren Buffett's Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) is crushing the market this year as value and dividend stocks have pulle...
0 comments
Post a Comment
Post a Comment
Note: Only a member of this blog may post a comment.