QUAD! Great turn around!

I’ve seen better stocks on the quad

I’m generally curious about this investment strategy. I see a stock that over the last year has dropped nearly 56% with a dividend payout that was recently cut in half ($0.30 per share per quarter to $0.15). And despite a huge beat bottom line and a beat on the top line, and a major improvement from the rest of year, I see a stock whose EPS has dropped from $0.53 a year earlier to $0.38 on revenue that has dropped from $1.17 to $1.07 billion.

Maybe I’m wrong with my approach, but if I’m looking at dividend stocks, I’m looking for both the relative short term (one year) and long term (5 year) history:

1. Price appreciation, or at the very least, the lack of depreciation.
2. Increasing dividend payout, or at the very least, a payout that doesn’t decrease.
3. If available, a positive future outlook, or at the best least, not a negative outlook from analysts.

And in regards to the first two points, this is why find dividend yields to be deceiving since they can be a result of poor performance (e.g., stock whose price has dropped significantly), and/or unsustainable (e.g., high payout ratios, sometimes exceeding 100%). As a result, I’ve rarely, if ever, found super high dividend yielding stocks (10% or higher) to be worthwhile as an investment for the future.