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.