Three Reasons You Should Love Dividend Stocks

Three Reasons You Should Love Dividend Stocks

I love buying shares of dividend stocks that pay a dividend. Dividends are a great way for companies to give back their earnings to the company’s shareholders. In classic finance theory, a company’s stock share price is derived from the present value of its future income…its dividends. Paid to Wait for Dividend Stock Prices to Increase There have been instances of good companies that have been caught in a value trap, and their stock prices have tread water for years. Microsoft is a great example that immediately comes to mind. Microsoft continued to trade in a very narrow range for years before breaking out earlier this year. But, the one good thing for investors was that Microsoft has initiated a dividend … Read more

What Is A Stock Split? And Should You Trade Before One?

What Is A Stock Split?

get in on the hottest iposA stock split is a tactical decision and action made by any publicly traded company’s board of directors that increases the number of existing shares by splitting or dividing the shares into more shares.

What Is A Stock Split?

At first glance, it is a positive thing to investors and stock shareholders since their number of shares owned will increase. But, in reality, a stock split is not a value adding event. It doesn’t detract the value either.

A stock split is just an accounting sleight of hand that increases the number of shares while maintaining the same overall value. The underlying value of a shareholder’s share is not changed at all by a stock split.

Nevertheless, a stock split is usually conducted at a time where the value of certain shares become way too high for new investors or are convincingly higher than other similar companies’ stock share prices.

This way, anyone who wishes to buy shares from a company is able to do so at lower costs since each share’s value is divided in certain multiples.

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Why Do Companies Carry So Much Cash On Their Balance Sheets?

A balance sheet of a company is where records of how much money the company has, how much debt it owes, and what is the remaining amount for the stockholders. It is a financial statement that lets investors know where the company stands with its financial accounts. If you want to keep track of how well the company you have invested in is doing and if they are in good status, you might want to check out those companies’ balance sheets. How Balance Sheets Are Constructed But if you are new to looking at these things, it is important to know something about balance sheets. The first thing you will see and notice in a balance sheet is the asset … Read more