Here’s how to figure out if a dividend stock is a BUY (in 5 minutes or less) Thread:

1) Payout ratio There’s some exceptions to payout ratios (REITs for example) but if a stock is paying out 60-70%+ of their earnings, I run away I like to see a ratio in the range of 35-55% This allows for growth but also internal reinvestment to fuel long term growth

2) Cash Flows The cash flows will tell you almost everything you need to know about a company It will tell you how they make money, where they make money from, how much of it they’re keeping and how they’re spending it Look at the free cash flow as well Cash is king

3) Beta We don’t want to hold stocks that are extremely volatile because that defeats the purpose of long term compounding Beta will tell you how volatile a company is relative to the market A Beta of 1 means the stock is equally as volatile as the stock market

4) Current Ratio Current Assets / Current Liabilities This ratio will tell you how well a company can meet its short term debts It’s a good number to know just in case sh*t hits the fan We want to see a current ratio above 1 in this scenario

5) Question Asking - Who are their competitors? - What’s their competitive advantage? - Are they market leaders? - How solid is their management? - Are they reinvesting for long term growth? - Any new product lines? - Can they expand into new markets?

You want to be able to analyze the company qualitatively as well Once you answer those questions you can now filter which stocks are a YES and which are a NO The YES pile now becomes your watchlist

Once you have your watchlist, you can do a deeper dive on those stocks to determine if they’re a BUY But the good part is that you can filter out the good from the bad ones very quickly Once you can do that it makes your job as an investor so much easier

If you want to learn more about dividend stocks join CFU @joincfu Our experts are ready to hold your hand on your journey to financial freedom Be careful, you might retire 20 years earlier than all of your friends Not convinced? You will be?

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