Value & Dividends – Criteria for Filtering Dividend Paying Stocks

If you’re looking for dividend paying equities it’s important to filter the possible candidates by one or , more likely, several criteria.

Here I list some such criteria for choosing dividend paying stocks.

  • debt / equity ratio  or gearing should be no more than 1 (=100%)
  • net debt no more than 2.5x EBITDA (operating profit)
  • free cash flow (FCF) should be higher than the paid dividend (as the companys’ substance would suffer otherwise)
  • growing or stable dividends in the past, falling dividends are a red light

Feel free to add, comment below. Or email me at mz@zuberbuehler-associates.ch . Please also see the excel list of dividend payment history of swiss stocks I published in this blog post.

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