When analyzing a company, it is good to keep good notes.  This is important for a few reasons:

  • Investors who keep good notes can reference back to understand why they made certain buy, sell or hold decisions when analyzing a company.
  • Investors with good notes can reference back to see if certain securities they bought turned out how they expected.
  • Investors can look over their analysis notes to try and learn when investments don’t go as planned.

Usually when I am looking at a potential investment I write up a stock research analysis on this site.  While that is a good exercise for me to work through, it is not the most organized of methods.  For this reason I created my Dividend Growth Stock Analysis Quick Reference Sheet.

In the future, along with my written analysis, I will fill out a quick reference sheet for each company I analyze.  This will allow me to easily reference back the different companies I have looked at.

Quick Reference Sheet Metrics

There are many different metrics I like to look at when reviewing a company.  If you look at the quick reference sheet, many will be easy to understand such as current date, company name and ticker, industry, current stock price, dividend yield and dividend amount.

The other metrics I like to keep track of are as follows:

  • Earnings Per Share (EPS):  I like to note down the most recent fiscal year end EPS.  If a couple of quarters has passed since the last fiscal year end, I may also note down the trailing 12 months EPS.
  • P/E Ratio:  I usually like to reference the P/E ratio based on the most recent fiscal year end’s EPS.  Once again if more than a couple quarters have passed then I will use the trailing 12 months P/E ratio.
  • 10 Year Average P/E ratio:  I use the Value Line investment survey to calculate the average P/E ratio over the past 10 years.  This is helpful when trying to determine current valuation of the company.
  • Earnings Per Share Trend:  Is earnings per share over the last 10 years trending up, down, sideways or is it erratic?  I only want to see this trend up.  A down year every once in awhile is fine, but generally I prefer earnings to be growing over time.
  • Outstanding Shares Trend:   I want to see outstanding shares over the past decade trending down or at least staying even.  I prefer not to see share count trending up.
  • Current Ratio:  The current ratio is the short term liabilities divided by short term assets.  This gives me an idea of a companies ability to meet short term obligations.  I prefer this number to be below 1.
  • Long term debt/Net Profits:  To make sure a company does not have too much debt I see how many years worth of profits it would take to pay off all long term debt of the company.  The fewer the years the better.
  • Dividend Payout Percentage:  This is the current annual dividend amount dividend by the earnings per share.  How much of earnings are being paid out in the form of dividends.  It is important to make sure a company is not paying out too much of thier earnings or else the dividend will be unsustainable and have no room for growth.
  • 1 and 10 Year EPS Growth Rates:  I believe that EPS growth is the creator of wealth when it comes to investing in stocks.  I like to calculate the rate at which the company has been growing EPS over the past decade and more recently.  In order for a company to grow its dividend, they must be able to grow EPS.
  • 1 and 10 Year Net Profits Growth Rates:  There are two ways a company can increase EPS. They either have to be decreasing shares outstanding or growing their total net profits.  I like to see the net profit growth rates relatively close to the calculated EPS growth rates.
  • 1 and 10 Year Revenue Growth Rates:  Once again, in order to grow net profits and EPS, companies must be able to grow their revenues over time.  I generally like to see revenue growth rates in line with net profit and EPS growth rates over time.
  • 1 and 10 year Dividend Growth Rates:  The whole idea of dividend growth investing involves investing long term in companies that annually grow their dividend payments to shareholders.  I like to see dividends grow at a rate faster than inflation, preferably 7% or higher over time.
  • Notes section:  The notes section is to mark down any thoughts I have while researching a company.  Does something concern me?  Has the company just announced a large share repurchase program?  Has there been any recent important news about a company?  What would my future return expectations be if I bought this stock at the current valuation?  Do I believe this stock to currently be a buy, sell or hold?  Any other thoughts I believe will be important to remember over time about the company.

I believe this to be a good work sheet to use in order to do a dividend growth stock analysis.  It is an easy place to compile all the relevant numbers needed for an investment decision.  Be sure to always do an in depth dividend growth stock analysis before making any investment decisions.

If you are interested, you can find my Dividend Growth Stock Analysis Quick Reference Sheet here.  Feel free to print it out and use it in your own research process.  Also, if you think it would benefit anyone you know in thier research process then please share the Reference Sheet with them.

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6 Responses to Dividend Growth Investing Stock Analysis Quick Reference Sheet

  1. Dustin Small says:

    Great suggestion Dan. I do something similar but in spreadsheet form instead. I find it very useful to be able to look back and see what my thinking was at the time. It’s always easier to look back and see what could have been better in hindsight, so having those notes available is a great asset.

    • Dan Mac says:

      Thanks Dustin. I actually have mine in a spreadsheet as well. Just wand to provide the readers with a PDF they can print and fill out for their own records. I think keeping a quick reference sheet with notes will be very helpful especially 10 or 20 years down the road when looking back to understand why you first bought some company in the first place.

  2. Seviay says:

    Can you provide the XLS or XLSX file that you use, for those of us who would rather go the more complex route?

    • Dan Mac says:

      Hello Seviay, I don’t actually know how to provide the xls document. Currently it is the same as the PDF, I just use the excel doc to type in the numbers and keep organized/saved on my computer.

      If anyone can provide guidance on how to provide excel documents through wordpress I’ll be happy to do so!

  3. Martin says:

    It is a great list Dan. Some of the metrics are new to me, not because I haven’t heard of them but because I wasn’t sure how to use it properly. I’ll give it a shot and read more about it. Hopefully your new book elaborates on it more in detail.

    • Dan Mac says:

      Thanks Martin! I hope you enjoy the book and I’d appreciate if you’d post a review on Amazon once you finish reading.

      This book is very introductory and the main focus on the book was giving an introduction to the dividend growth strategy and then the 35 companies I focus on.

      I do have plans for a more in depth book going into much more detail but that will be sometime in the future.

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