From Dividend Growth Stocks:
Any master architect will tell you the the key to a quality structure is its foundation. Solid buildings have firm foundations. The more solid the foundation, the less likely the building will suffer damage from storms, earthquakes, or settling of the earth. In much the same way, the foundation of solid Dividend Growth Stocks is their financials. Here's what to look for when evaluating a dividend stock's financials...
Changes in shareholder equity are a result of earnings, dividends paid, treasury stock purchased, stock options exercised, and stock issued. If shares outstanding aren't increasing and equity is rising, the business is generating sufficient earnings to cover dividends and share repurchases. Increasing the value of the company by running the business well is a sign of a healthy company.
Many companies sell stock to raise cash. The important question is what...
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