Buy Dividend Stocks November 27, 2012 bizadmin If you want to buy stocks, go for dividend stocks with a dividend yield of about 10%. If you keep collecting the dividends for 10 years, it would have paid for the stock and anything beyond that is net profit. There are a few formula to consider when deciding to choose dividend stocks. Some people depend on the cash received from the dividends for their livelihood. If you are an accountant, investing in shares will be much easier as you would be used to number crunching. The current ratio is a test of a company’s financial strength. It calculates how many dollars in assets are likely to be converted to cash within one year in order to pay debts due during the same year. You can find the current ratio by dividing the total current assets by the total current liabilities. By investing in dividend stocks, you should look out for dividend yield of more than 2%. Dividend yield is calculated as annual dividend price over the price per share of the stock. Look out for dividend stocks that pay consistently every year. This means that the company is making profits annually and sharing its profits with shareholders. As a shareholder, you are just like the owner of the company. Stock trading involves understanding the business and nature of the company well and not just simply invest without any knowledge whatsoever about the business nature.
