Monday, February 12, 2024

Dividend Stocks With Tiny Payout Ratios

Looking for a stock that will grow its dividend in the future and pay you handsomely now? The yield is not the only thing you need to focus on. You will also need to check the stock's Free Cash Flow Payout. This tells you how much cash the stock has left over after paying the normal operating expenses. This is the cash used to pay for acquisitions, debt obligations and dividends!

The formula for Free Cash Flow Payout is simply Annual Dividend Per Share divided by Free Cash Flow Per Share. Free Cash Flow is Operating Cash Flow less normal capital expenditures (normally the first line in the investing section). 

My database, D4L-Data, is an Open Office spreadsheet containing more than 20 columns of information on the 150+ companies that I track. The data is sortable and has built-in buttons and macros to make it easy to use. Companies included in the list are those that have had a history of dividend growth. The D4L-Data spreadsheet is a part of D4L-Premium Services and is updated each Saturday for subscribers.

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