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 firstname.lastname@example.org . Please also see the excel list of dividend payment history of swiss stocks I published in this blog post.