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SDS (Seductive Dividend Stocks)
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Sorry I hide my true identity but I'm a physicist/engineer, native contrarian and idea generator. I am an eclectic dividend investor with motto "In God We Trust, All Others Pay Cash" applied to companies I invest in. I like to read /and read a lot - did you look on my SA photo 8-)? / including... More
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  • How to compare "The Bird in the Hand" with "The Bird in the Sky" or select dividend-paying stock? 0 comments
    Aug 12, 2011 2:30 PM

    I use a simple equation to compare dividend stocks:
    Current yield * (1+Average Dividends Growth Rate) * Average Holding Period * (1-Probability of Dividends Cut) * (1-Probability of Company Liquidation).
    The higher is the result - the better is the stock, but double check that risks factors (2 last terms in the equation) are not underestimated.

    My average holding period is about 6 years, I stay away from companies that might close doors and monitor dividends cut probability.

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