Historical Yield Analysis

Historical Yield Analysis

Analyzing a company’s historical dividend yield provides insights into its dividend consistency and reliability.

  • Example: A company with a stable or growing historical algostocks.com yield over the past 밀 관련주 decade indicates consistent performance and potentially lower risk.

Total Return Consideration

Focusing solely on dividend yield can be misleading. Investors should also consider total return, which includes capital appreciation and dividends.

  • Example: A company with a 2% yield and 10% annual stock price growth may offer a better total return than a company with a 5% yield but stagnant stock price.

Assessing Dividend Sustainability

High dividend yields can sometimes signal potential risks. Assessing the sustainability of dividends is crucial to avoid dividend traps.

Dividend Coverage Ratio

The dividend coverage ratio compares a company’s earnings to its dividend payments. A higher ratio suggests better dividend sustainability.

  • Example: A company with earnings per share (EPS) of $6 and dividends per share (DPS) of $2 has a coverage ratio of 3, indicating strong earnings coverage for dividends.

Free Cash Flow

Free cash flow (FCF) is the cash generated by a company after accounting for capital expenditures. Positive FCF supports sustainable dividends.

  • Example: A company with $100 million in FCF and $30 million in dividend payments has ample cash flow to maintain its dividend.