Cash Flow: The Key to Dividend Stocks

Dividend investing may look easy to some, but it’s much more difficult than just selecting stocks with the highest dividend yields.

Many novice investors focus all of their attention on stocks offering the highest yields. After all, the dividend income is why they are considering these stocks in the first place. So picking the stock that offers the highest dividend payment seems to make sense.

Unfortunately, many of these investors soon learn that there is more research needed than just evaluating a stock’s dividend yield.

Some investors will take the next step and evaluate the company’s ability to continuing paying their dividend. Unfortunately, most investors just look at earnings per share (EPS). If a stock earns $2 per share and pays out $1 per share, it would seem to have a safe dividend.

Of course the novice investor doesn’t understand the intricacies of GAAP accounting. A prudent investor digs beyond net earnings to look at a company’s cash flow. There are many methods for manipulating quarterly earnings, but it’s much more difficult to manipulate cash flows (at least legally).

The key to evaluating dividend stocks is cash flow! If there is only one factor that you use to evaluate dividend stocks, it should be their cash flow and specifically their free cash flow.

Free cash flow is actually very simple to calculate. On a company’s statement of cash flows, just subtract their cap ex spending from their operating cash flows. The result is the free cash flow that they can use for dividends, stock repurchases, acquisitions, etc.

Yo mate, I remember ya! You are the guy who hold Panamy with cost at RM10 or below.

My Panamy is not for sale. 

so how did u come about this King conclusion?

who cares, u still havent answered the question.

Harison & Panamy's chart look alike.

Price stabilize for 2-3 months already. Also indicated now is the best time for accumulation.

Not sure about Harison, but for Panamy share price will move up when it is getting closer to May'12 aka big dividend month. I am a happy Panamy shareholder since 2010.

Hehe you read my mind.

Aiming for Panamy to achieve that goal for me. Gotta add more stake before this giant moves

Your goal is awesome! Gotta make that my aim too!!

After 25% tax, no more RM1200 lo.

Don't laugh at me, it took me 2 years to accumulate.

Currently I have 1,000 shares of Panamy at average cost RM16.80

Am going to buy another 200 to 300 shares before March'12.

You really like divvy eh? Check out this blog. This guy is getting 6 figures a year from dividend alone... and he is only 40+ years old working man (salesman).  Good motivation for those who like dividend investing and also he a very kiamsiap kiasu kiasi...  Maybe thats what is required to achieve financial independence... 

Divvy Blog...

Wow this is SO INSPIRING! *Like!* 

S$ 104,826.14 = RM254,767.59 per year

Aka RM21,230.58 per month!

Webpage bookmarked!

P/s: Assuming a 7% yield, the author capital is about S$1.5mil (RM3.5M)

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For M-REITS, this guy is doing equally good as well. (with RM150,000 capital only) 

http://max-wealth.blogspot.com/2011/09/reits-sep-2010.html

IF BIG IF one bought div stocks during the crsis, one would be doing very well.
BUT can one always time that?   

Not possible i would say.

Panamy at Rm9.80 and Boustead at Rm2 does not come by everyday 

Possible if Panamy announce a 1:1 bonus issue I forsee that gonna happen.

I think he means undiluted price. lol..

Panasonic Malaysia is a company engaged in the business of sales, service and marketing for the Panasonic brand of electrical and electronic consumer and business solutions. Through our wholly owned subsidiary, Panasonic Systems Engineering (PSE) we offer professional expertise in integrating system solutions from design, supply, installation, training and maintenance of professional electrical and electronic equipments and products.

PM is supported by a wide dealer network of more than 140 Panashops and over 750 authorised dealerships. To maintain customer's satisfaction, PM has a total of 8 Panasonic Service Centres and 236 dedicated Panasonic Service Networks throughout Malaysia. Today, its operation has rapidly expanded with a total of 11 branch offices nationwide employing a total workforce of more than 400 in Panasonic Malaysia and its subsidiary, and achieving a total sale of RM1.3 billion as of FY2006.

been downgraded.

http://klse.i3investor.com/servlets/anpth/100210.jsp

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Added on April 11, 2012, 4:38 pmhttp://www.btimes.com.my/articles/panatvf/Article/

KUALA LUMPUR: Panasonic Malaysia Sdn Bhd expects sales for its current fiscal year ending March 31 2012 to be RM1.85 billion, short of RM500 million from the initial target of RM1.9 billion.

Managing director Jeff Lee said the company suffered five per cent drop in sales due to Japanese earthquake and tsunami as well as Thai flood.

"The natural disaster has affected our stock supply and shortage of deliveries," he told reporters after the launch of Panasonic new Smart VIERA televisions (TV) and Eco refrigerators yesterday

Panasonic introduced 30 new TV models of which 12 models are Plasma TVs, 16 models light emitting diodes (LED) TVs and two models of liquid crystal display (LCD) TVs as well as seven new Eco refrigerator models from Econavi, Inverter and Top Freezers.

The firm targets to sell 250,000 units of its new TV units and 135,000 units of new refrigerator products between now and end of the year.

Lee said the current trend in consumers electronic industry is toward "greener gadgets" which are smarter, more energy-efficient devices.

"Consumers now want more eco-friendly options on how to use them efficiently and comfortably for the enrichment of their lifestyles.

"To meet this demand, Panasonic has been aggressive in accelerating its efforts to manufacture and promote consumer electronic products that are smart and eco features," he said.

Currently, Panasonic's local market share for Plasma TV is above 45 per cent while LED and LCD is 15 per cent. Meanwhile, its market share for refrigerators stands at 22 per cent.

With the launch of new products, Panasonic hopes to maintain the 45 per cent market share for Plasma and more than 20 per cent for both LED and LCD, as well as achieving 24 per cent of share for refrigerators.

Read more: Panasonic: Sales may drop to RM1.85b http://www.btimes.com.my/articles/panatvf/.../#ixzz1riegfvBK

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Added on April 11, 2012, 4:41 pmBtw, i think more people prefer SONY, SAMSUNG, LG than panasonic. Panasonic is an old brand, its like outdated and trying hard to improve.

Panasonic Malaysia Sdn Bhd expects sales for its current fiscal year ending March 31 2012 to be RM1.85 billion, short of RM500 million from the initial target of RM1.9 billion.

Panasonic Japan has nothing to do with Panamy.

Main Shareholders/Parent Company
Panasonic Corporation
1006, Oaza Kadoma, Kadoma-shi, Osaka 571-8501, Japan
URL: http://panasonic.net

Principal Activity Panasonic Malaysia Sdn Bhd is a sales, service and marketing company for the Panasonic brand of electrical and electronic consumer products ranging from home appliances, audio-visual, digital cameras, car entertainment systems, air conditioners, business systems & solutions, telecommunications, professional broadcasting solutions, health and beauty care to batteries and lightings.

http://www.panasonic.com.my/wps/portal/hom...orporateprofile

Panasonic Japan is its parent company, yes.
But operational wise, profit issue has nothing related to Panasonic Japan business issue.
Even Panasonic Japan making huge loss or huge profit, has nothing to do with operation of Panamy.

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