Some blue chip stocks were down substantially since last year. With that drop, dividend yield (in %) looks attractive for some stocks. (Reits are not subjects of this post.)
One investment strategy in this climate is to go for dividend stocks offering good dividend yields based on most recent annualised dividends.
When borrowing cost of company is going up as a consequence of US Fed raising interest rate, it makes sense to go for companies with lower debts where debt servicing does not seriously impact the company. Debt/Equity (D/E) ratio provides that kind of data.
Information for the table was extracted from SGX’s StockFacts. D/E (in %) is total debts divided by equity.
|Counter||Share Price @ 14.12.15||Div Yield %||D/E %|
One needs to strike a balance between Dividend Yield and D/E ratio. My threshold for D/E ratio is 50%, ie corporation borrows up to 50% of total shareholders’ funds. (Note: Debt financing is a complex matter and it cannot be simplified into just a number.)
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