1Semana
I like your approach and, above all, your strategy. I’m pretty much on the same page as you when it comes to the income aspect of my investment—my goal is to have additional income in my old age.
For the Stoic Dividend Foundation, I follow these rules:
1. The Dividend Filter (Income Basis)
Dividend yield: At least ≥ 3.5%. I’ll only accept a lower yield in exceptional cases, when dividend growth is extremely high and the balance sheet is absolutely rock-solid.
Sustainability: No “pseudo-dividends” drawn from equity or financed by new debt. The dividend must be fully covered by actual cash flow.
2. The Most Important Valuation Ratios
Whenever I analyze a company, I routinely calculate and review these five ratios:
P/E Ratio (Price-to-Earnings Ratio): Must align with earnings power to avoid including overpriced stocks in the portfolio.
P/CF (Price-to-Cash Flow Ratio): Extremely important for assessing net asset value.
P/S (Price-to-Sales Ratio): Used to contextualize the fundamental valuation within the industry.
P/B Ratio (Price-to-Book Ratio): Shows me how the market values the company’s net asset value.
Dividend Yield: (calculated based on the current market price).
3. The Cash Flow Quality Formula (The Cash Machine)
An FCF yield of > 5% is considered attractive; at > 8%, it is very attractive.
A negative FCF is an absolute deal-breaker for the earnings foundation.
4. The Ironclad Exclusion Rules (Immediate Veto)
I won’t buy the stock if:
Revenue growth is stagnant or negative.
The operating margin is consistently < 5%.
The narrative becomes more important than the raw numbers (no stocks based purely on hype or wishful thinking).
I’ll see if there are any stocks in your portfolio that might be right for me.
Have a great weekend
For the Stoic Dividend Foundation, I follow these rules:
1. The Dividend Filter (Income Basis)
Dividend yield: At least ≥ 3.5%. I’ll only accept a lower yield in exceptional cases, when dividend growth is extremely high and the balance sheet is absolutely rock-solid.
Sustainability: No “pseudo-dividends” drawn from equity or financed by new debt. The dividend must be fully covered by actual cash flow.
2. The Most Important Valuation Ratios
Whenever I analyze a company, I routinely calculate and review these five ratios:
P/E Ratio (Price-to-Earnings Ratio): Must align with earnings power to avoid including overpriced stocks in the portfolio.
P/CF (Price-to-Cash Flow Ratio): Extremely important for assessing net asset value.
P/S (Price-to-Sales Ratio): Used to contextualize the fundamental valuation within the industry.
P/B Ratio (Price-to-Book Ratio): Shows me how the market values the company’s net asset value.
Dividend Yield: (calculated based on the current market price).
3. The Cash Flow Quality Formula (The Cash Machine)
An FCF yield of > 5% is considered attractive; at > 8%, it is very attractive.
A negative FCF is an absolute deal-breaker for the earnings foundation.
4. The Ironclad Exclusion Rules (Immediate Veto)
I won’t buy the stock if:
Revenue growth is stagnant or negative.
The operating margin is consistently < 5%.
The narrative becomes more important than the raw numbers (no stocks based purely on hype or wishful thinking).
I’ll see if there are any stocks in your portfolio that might be right for me.
Have a great weekend
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1Semana
@Raketentoni That's a great list—those are definitely very important criteria for a strategy like this. However, if you get too caught up in individual metrics, you often lose sight of the big picture. Furthermore, metrics can vary significantly from sector to sector, which is why you should always evaluate companies within the context of their respective industries.
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1Semana
@Raketentoni I have Oxford Lane Capital here as a negative example—it’s been in my portfolio for years—and yes, the stock price has plummeted, but the dividend payments haven’t. Most people would have gotten cold feet at some point and sold out, but I just held onto the shares, collect the dividends every month, and hope that the price will rise again—which many analysts are predicting... We’ll just have to wait and see. Another example is BCAT—it also took a dip at one point, but NOW I’m back in the black in terms of price. The GlobalX ETFs are also interesting; they’re all structured in Ireland, are withholding tax-free, and are performing very well with an average monthly dividend yield of 14%. In addition, there are also conventional stocks like SITC, for example—I bought in at 1.80 back then, and now they’re over 4 euros. With a twice-yearly dividend yield that’s also a solid 10% or more. I just happen to have quite a few of these kinds of stocks in my portfolio. GlobalX NAS 100, S&P 500, SuperDividend, and a few others are the mainstays here… along with the three-digit amount that Oxford Lane, for example, pays out every month.
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