Comments on: Is stocks that pay dividend to preferred stockholder more than what it earns still worth buying? http://www.stocklyrics.com/is-stocks-that-pay-dividend-to-preferred-stockholder-more-than-what-it-earns-still-worth-buying/?utm_source=rss&utm_medium=rss&utm_campaign=is-stocks-that-pay-dividend-to-preferred-stockholder-more-than-what-it-earns-still-worth-buying It's all about the money Thu, 03 Nov 2011 14:13:18 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: muncie birder http://www.stocklyrics.com/is-stocks-that-pay-dividend-to-preferred-stockholder-more-than-what-it-earns-still-worth-buying/comment-page-1/#comment-16004 muncie birder Thu, 27 May 2010 00:28:28 +0000 http://www.stocklyrics.com/is-stocks-that-pay-dividend-to-preferred-stockholder-more-than-what-it-earns-still-worth-buying/#comment-16004 The answer might be yes. The preferred dividend is fixed. It does not grow. It may be that there is a temporary downturn in earnings which will rebound. Is the preferred stock callable any time soon? Does the company have any debt. Perhaps the preferred can be converted to debt. Most importantly, look at the cash flow. Does that more than cover the preferred dividend? Occasionally, a company will have very large depreciation. You mentioned that sales are growing 25% annually. Are earnings? That is very important too. If sales and earnings are growing at 25% and if the pe is low enough, it might very well be a buy. Especially if the preferred is callable and the company does not have any debt. The answer might be yes. The preferred dividend is fixed. It does not grow. It may be that there is a temporary downturn in earnings which will rebound. Is the preferred stock callable any time soon? Does the company have any debt. Perhaps the preferred can be converted to debt.

Most importantly, look at the cash flow. Does that more than cover the preferred dividend? Occasionally, a company will have very large depreciation.

You mentioned that sales are growing 25% annually. Are earnings? That is very important too. If sales and earnings are growing at 25% and if the pe is low enough, it might very well be a buy. Especially if the preferred is callable and the company does not have any debt.

]]> By: duediligencebeforeinvesting http://www.stocklyrics.com/is-stocks-that-pay-dividend-to-preferred-stockholder-more-than-what-it-earns-still-worth-buying/comment-page-1/#comment-16003 duediligencebeforeinvesting Thu, 27 May 2010 00:26:03 +0000 http://www.stocklyrics.com/is-stocks-that-pay-dividend-to-preferred-stockholder-more-than-what-it-earns-still-worth-buying/#comment-16003 It is very rare for a stock to pay out more than it makes unless the dividend is part of the corporate officers compensation. If the corporate officers are the preferred shareholders and the company is in bad times then this may not be as bad of a situation as it looks. If this is the case and you feel the company is on the brink of something good then you may want to buy in to it. Now if the company is doing well and is paying out more than they are making to preferred shareholders then stay away and report it to the SEC because they are diluting the wealth of the company to a select few at the expense of other which is illegal. It is very rare for a stock to pay out more than it makes unless the dividend is part of the corporate officers compensation. If the corporate officers are the preferred shareholders and the company is in bad times then this may not be as bad of a situation as it looks. If this is the case and you feel the company is on the brink of something good then you may want to buy in to it. Now if the company is doing well and is paying out more than they are making to preferred shareholders then stay away and report it to the SEC because they are diluting the wealth of the company to a select few at the expense of other which is illegal.

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