If you are considering buying a stock purely for its dividend yield, then you will want to be sure that the dividend can grow in the future. As such, it's not simply a question of picking out a high-yield stock and sticking with it in the long term. Usually, investors will want to make a qualitative analysis of the stock, and quite often, a quantitative analysis. Not least because the numbers often demonstrate the underlying trends in a company's business. With this in mind, here are three essential checks that you should make before buying a stock for its yield.
1.) Profit margin trends - This is one of the most important metrics in all of investing. The trend in profit margin tells you a lot of what you need to know about a stock. 2.) Return on equity - Return on equity (RoE) measures how much profit a company generates from its net assets. Dividends from free cash flow - Free cash flow (FCF) is what's left from earnings after working capital requirements and capital spending have been taken out.
Source: Motley Fool
Related Articles:
3 High-Yield Dividend Investing Tips That Could Earn You Thousands
Posted by D4L | Wednesday, May 26, 2021 | ArticleLinks | 0 comments »________________________________________________________________
Subscribe to:
Post Comments (Atom)
~
Popular Posts Last 30 Days
-
Long-term investors know that dividends can have a major impact on returns over time. When the stock market is struggling to make gains like...
-
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...
-
We decided to go on a hunt for quality stocks that for one reason or another have been buried, and not just this year. We found three incred...
-
Buy and hold ... forever? It's a tall order, but a select few companies are potentially up to the task. You can build a wealth-compoundi...
-
Does the high interest rate environment we're living in have you feeling down? Here's something to remember that can help you turn t...
-
Dividend stocks can be consistent market-beaters. However, empirical research shows that the best dividend stocks tend to generate better-th...
-
High-quality dividend stocks are always worth loading up on. This is doubly true for companies that offer shareholders an attractive mix of ...
-
Some dividend-paying companies have seen their financials struggle over the years. These companies become vulnerable to dividend cuts which ...
-
Essentially, we’re looking for more Apples – tech firms with a large market cap (at least $1-billion) and the financial means necessary to p...
-
Numerous high-quality dividend opportunities are up for grabs at the moment, which may be appealing to some investors given the uncertainty ...
0 comments
Post a Comment
Post a Comment
Note: Only a member of this blog may post a comment.