07-13-2015, 12:36 PM
How I look at stocks:
1) Dividend history: How many years of dividend raises? I look at periods of flat dividends better than historical dividend cuts.
2) P/E: my personal rule is less than 20. Note, this does not apply to REITs, which have their own set of rules.
3) Payout ratio (Dividend per share/Earning per share): I like to stay under 60%. This differs for REITs, utilities, telecom, and tobacco.
4) Dividend yield: I prefer to be over 3% and I never go lower than 2.5%. I like to wait for things to go sale, which is why my average initial yield is roughly 4.2%. Remember, taxes are usually different (higher) for REITs and MLPs, which is why their yields are higher.
5) Growth: More and more I am actually looking at revenue growth. How will this company expand in the future? With more revenue growth, you will get dividend growth. Be wary of companies that are consistently raising dividends faster than they are raising revenue/profit.
6) Chowder Rule: as stated above
1) Dividend history: How many years of dividend raises? I look at periods of flat dividends better than historical dividend cuts.
2) P/E: my personal rule is less than 20. Note, this does not apply to REITs, which have their own set of rules.
3) Payout ratio (Dividend per share/Earning per share): I like to stay under 60%. This differs for REITs, utilities, telecom, and tobacco.
4) Dividend yield: I prefer to be over 3% and I never go lower than 2.5%. I like to wait for things to go sale, which is why my average initial yield is roughly 4.2%. Remember, taxes are usually different (higher) for REITs and MLPs, which is why their yields are higher.
5) Growth: More and more I am actually looking at revenue growth. How will this company expand in the future? With more revenue growth, you will get dividend growth. Be wary of companies that are consistently raising dividends faster than they are raising revenue/profit.
6) Chowder Rule: as stated above