One of the biggest challenges for most investors is finding a stock that can help to increase their overall returns and provide them with income. The problem that they will encounter is finding a company that has the ability to pay dividends. This is because a number of corporations will often provide shareholders with small dividend payouts over a limited amount of time.
Once this occurs, the firm may continue to pay this amount until there are changes in the underlying financial condition. At which point, management will either reduce or eliminate the dividends entirely. This is troubling, because it can have a negative impact on the total return of the portfolio (which will hurt the firm’s ability to reach a number of financial objectives).
Avoiding these kinds of situations requires finding companies that have the ability to pay their dividends in the future. Several firms that meet this criteria include: Cisco Systems (CSCO),Vodafone (VOD), General Electric (GE), Microsoft (MSFT), Waste Management (WM) and Intel (INTC). This article analyzes these stocks for their ability to pay dividends. In this article, I am not advancing these names on a valuation basis.
To determine the strengths of dividends with each firm requires using tools that have been shown to be effective in analyzing these figures. The way that this will be accomplished is by focusing on the dividend growth rate, the payout ratio and the competitive advantages. Once this takes place, is when it will be clear as to how this will provide shareholders with stability. To continue reading, click here.