12-11-2021, 09:04 AM
"Her Investment Philosophy was the belief investors should focus on dividends, rather than earnings because it’s too easy to manipulate earnings figures in financial statements."
I consider what she said overall re dividend-payers vs growth largely true though it always comes down to what you pick. A good growth stock picker will blow away a bad dividend stock picker.
Focusing on the quoted comment, this much is true but IMO if you dig down into ERs for revenues and cash flows you can get much closer to "financial truth" with a company. I use earnings in my initial screen because this is what I can get. But when it comes time to make an actual first buy I dig into the ARs for the previous five years and look for revenues and cash flows. Lot of companies with good earnings growth fueled by buybacks. I want growing companies and don't consider a company with 10% eps growth and 10% fewer shares to be growing.
I consider what she said overall re dividend-payers vs growth largely true though it always comes down to what you pick. A good growth stock picker will blow away a bad dividend stock picker.
Focusing on the quoted comment, this much is true but IMO if you dig down into ERs for revenues and cash flows you can get much closer to "financial truth" with a company. I use earnings in my initial screen because this is what I can get. But when it comes time to make an actual first buy I dig into the ARs for the previous five years and look for revenues and cash flows. Lot of companies with good earnings growth fueled by buybacks. I want growing companies and don't consider a company with 10% eps growth and 10% fewer shares to be growing.