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How to use this research report

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data: Portfolio123.com

Note: use this feature for researching common stocks only. It will not work for ETFs, preferred stocks, mutual funds, or closed-end funds.

Here are suggestions for interpreting the information shown in our Research report for each stock 

Business Summary
This section describes the company, including its business sector. The outlook for dividend stocks is usually as much about the industry as the individual stock. Make sure that you understand the near-term (next six months) outlook for the stock's industry (the Yahoo Headlines section described below would be a good starting point for your industry research).

1-Year Daily Chart
Give preference to stocks with flat or uptrending price charts. Avoid stocks that are in downtrends (price on right-side is lower than price on left-side of chart).

Profile
Defines economic sector (e.g. technology) and industry (e.g. semiconductors), plus additional information about a company (the company description in the Business Summary section better defines a firm's business than the sector and industry information in this section).

EPS Estimates
Although dividends come from cash flow, not necessarily earnings, growing earnings usually translate to rising cash flows, and vice versa. Give preference to stocks with next year forecast earnings (Nxt Y) above the current year forecast (Cur Y). Avoid stocks with forecast next year earnings below the current year forecast.

Dividend Risk
Dividends per share: This line lists the past three years' annual dividends, plus the dividends paid over that last four quarters (TTM). The best dividend candidates have solid dividend growth track records.

% of Operating CF: Operating cash flow is the cash that flowed into, or out of, a firm's bank accounts as a result of its basic operations. This factor compares dividends paid out to operating cash flow. For many dividend stocks, non-cash accounting deductions such as depreciation and amortization reduce earnings, but not the cash available to pay dividends. Thus, operating cash flow, not net income (earnings) is the most important dividend risk factor. Dividend/cash flow ratios exceeding 100% signal risk of a dividend cut.

% of EBIT: Compares dividends paid out to operating earnings (earnings before deducting interest and income taxes). Another commonly used dividend risk gauge (lower is better).

% of EBITDA: Many analysts consider EBITDA (earnings before deducting for interest, taxes, depreciation and amortization) the best gauge of a firm's operations. This factor compares dividends to EBITDA (lower is better).

Dividend History
Displays historical dividend going back two years. Give preference to stocks with a history steadily growing dividends as opposed to stocks with erratic payout histories. 

Financial Strength Ratios
Use this section to asses financial strength.

Current Ratio: Compares current assets (cash, inventories and accounts receivables) to current debts, which are obligations that must be paid within a year. Ratios below 1 indicate that current bills exceed current assets, which warns of a potential cash crunch.

Quick Ratio: Similar to current ratio except that it doesn’t count inventories when it computes current assets. Thus it’s a more conservative measure since inventories may not be readily convertible to cash.

Long-Term Debt to Equity: Compares long-term debt to shareholders equity (book value). A zero ratio means no debt and the higher the ratio, the higher the debt.

Interest Coverage: Compares the last 12-month’s earnings (before deducting interest and taxes) to interest payments over the same period. For example, a ratio of three means that earnings were triple the interest payments over the past 12-months. While ratios of four or higher signal strong interest coverage, ratios usually have to sink below two before firms get into trouble.

Dividend Payout Ratio: Dividend percentage of net income. Not useful because non-cash accounting entries, such as depreciation, subtract from net income, but don't affect a firm's ability to fund dividends.

Financial Strength - Group Comparison
Use this section to compare a firm's financial strength indicators to its industry and sector.

Yahoo Headlines
This section lists recent news headlines. Click on a headline to see the complete story. The more you know about a stock and its industry, the better your results.