Disclaimer – I’m just a normal person like yourself shopping for dividend stocks. Here are some things I look for in the stocks I purchase that have done me well.
P/E ratio: I look for PE’s under 18. A PE over that value usually means a stock will not grow.
EPS vs Dividend payout: If a company earns $1 per share, but pays $2 a year for dividends, that money doesn’t grow on trees. I usually look for dividends to be 75% or less of the EPS. However this isn’t the case for REIT’s or BDC’s. I will talk about them on another page.
Positive Cash Flow: I think this goes right with EPS. A company needs cash to pay and to be able to continue to pay dividends.
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