Dividends4Life: Key Dividend Metrics You Need To Know

Key Dividend Metrics You Need To Know

Posted by D4L | Wednesday, May 28, 2014 | | 0 comments »

Although dividend investing can seem overwhelming and complicated, it really doesn't need to be. Nor do you need to be a financial professional or CPA to make sense of it all. A few red-flags to watch out for, as well as specific ratios to look at, will help you buy a dividend titan instead of a dividend dud. Here are four key dividend metrics I look at, when initially screening dividend stocks:

Dividend Yield: The dividend yield is probably the easiest metric, and the first place to look. I want to invest in companies that are paying me a reasonable dividend yield for being a shareholder. Dividend Payout Ratio: The dividend payout ratio is very easy to calculate. The key figures you need are EPS (earnings per share) and the dollar amount of the Annual Dividend. Debt to Equity Ratio: If a company has a high payout ratio, chances are it also has a high debt load. Profit Margin: A profitable company will generally stay out of debt, pay me a reasonable dividend, and grow that dividend over time.

Source: Seeking Alpha

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- Income Annuities vs. Dividend Stocks
- 7 Tech Stocks With A History of Growing Their Dividends
- Here's Where To Find Great Dividend Stocks
- 8 Higher-Yielding Consumer Stocks With A History of Rising Dividends

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