The 1 Metric I Check Before Buying Any Dividend Stock
It's a simple yardstick for an income investment, but sometimes, the simplest tools are also the most important ones to start the job with.
Overview
There are several details I consider before adding any particular stock to my portfolio. One of them is the ticker's price in relation to its earnings or the amount of revenue that the company is turning into reliable cash every quarter. The organization's past and projected earnings growth are also important starting points for me.
For my income-generating stock holdings, though, there's one crucial measure I consider before any other: their dividend yield. Here's a concise explanation of what dividend yield is, and why you should put it at the top of your list of criteria, too.
Details
It's not a complicated concept. Dividend-paying companies distribute per-share cash payments to their investors on a regular schedule, usually quarterly.
Source
Originally published at www.fool.com.