Long Shot: A Hidden Gem Among Banks
I recently had a discussion with a fellow investor who pointed out that some investors were either not in a position or of the temperament to wait for the market to fall into a depressed state before putting money to work. Some income oriented investors in particular may need the income now, so they may have to commit the unforgivable sin of spending capital if they are forced to wait for a better entry point. Even when this is this case, you should not abandon sound principles. I want to maintain some measure of long-term safety while collecting my dividends and I also want the prospect of inflation-beating performance. I want companies in this "buy it now" portfolio that have sound fundamentals and the prospect of future dividend increases.
I ran a basic screen looking for stocks that paid at least 3% in annualized dividends and had a solid history of dividend growth. As a measure of financial strength and potential for appreciation, I used the Piotroksi F score. (I have found this measure to be one of the best indicators of financial and operating improvement and companies with the two highest rankings would seem to offer a certain amount of financial safety.) This simple screen turned up some stocks that income investors could buy and sleep at night while collecting their dividends. Although they will still get hit in a broad market decline, history shows us that these types of stocks continue to pay generous dividends and rebound quickly when the market recovers....318 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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