As investors, we have to keep an eye out for our holdings. Everyone is happy when things are good, but when things go south, everyone runs for the hills. As long-term investors, we don’t worry about the fluctuations in the stock market, but we do need to be aware of fundamental changes.
Dividend increases are one of my favorite strategies (Dividend Growth Investing). But on the other hand, dividend cuts are one of the first red flags and early signs to show that a company may be in financial trouble.
Another red flags to consider are low amounts of cash available. Again, you can use Finviz to find the current and quick ratios. A metric of 1 or higher is usually a sign of enough money to cover expenses. However, that also depends on their debt.
Debt to Equity and Long-term Debt to Equity is preferable under 1 to show a low debt. It is all dependable on the industries and sectors. Some sectors run with high debt, while others may have zero debt.
In my book, as long as the quick ratio and current ratio are higher than debt to equity and long-term debt to equity, it is good enough for me.
Without further ado, let’s take a look at the dividend increases and dividend cuts for the first 18 days of February 2022.
The stock market will move up over time. However, that doesn’t mean we have to marry a stock forever. Some companies manipulate their books to look better than they should show, but that only lasts for so long until they can’t do it anymore. The best example for all investors was Enron. You can Google information on all the tricks they did until going bankrupt.
We can ride the ship up but should never ride it all the way down. We are not the captains of those ships. We are captains of our investment accounts, and that is all we care about now and in the future.
Stay vigilant and protect your capital.
Now, begin your Road to Wealth!
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