When you invest in dividend stocks
you need also look at internal return rates. The most popular ratios are return
on equity and return on investment.
A company that has
a big return on equity and also low debt ratios means that the high ratio was
not created by taking debt and boosting earnings. Great for us investors; we
own a piece of a high income generating company.
If the company can
scale up its sales by taking more debt and issuing new shares, our return could
boost. That's also one reason why I look at low debt with good return on equity
ratios. If the company also do stock buybacks and hiked dividends, great!
My experience is
that no companies fulfill everything. It's no shame when a company suffers and
do not meet every optimum value. Each business is volatile and risky.
I've tried to
create a screen, based on some return figures. Below are my 8 favorites. At the
end of this article, you can find a list with 16 additional stocks.
These are my main criteria:
- Midcap+
- Forward P/E under 15
- Operating Margin over 15 percent
- Debt-to-equity under 1
- Return on Equity 15%+
- Payout half of profits
- Mid-digit Earnigns growth forecasts
These are my main criteria:
- Midcap+
- Forward P/E under 15
- Operating Margin over 15 percent
- Debt-to-equity under 1
- Return on Equity 15%+
- Payout half of profits
- Mid-digit Earnigns growth forecasts
8 high return creating
stocks, low debt and price ratios included are...