Don’t invest for income according to how much money you need;
invest in quality companies with strong dividend performance.
Yield
Dividend growth
Payout ratio
Never buy a stock simply becuase its yield is attractive.
Dividend Growth is the preferred way for young investors.
The stock market is all about growth.
A key component in the formula is dividend growth. Without it, the dividend will lose its buying power due to inflation. Even with low inflation, over the years, the money won't buy as muh as it used to.
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For me, I focus on the operating cash flow to determine the company's health.
ReplyDeleteDividend is just a bonus to shareholders. Sometimes it may not be good if the company keep paying out dividends to shareholders instead of putting it to good use.
Regards,
Gerald
SG Wealth Builder (www.sgwealthbuilder.com)
We need to look at both dividend and dividend payout ratio at the same time and not just dividend only.
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