Canadian Stock Dividend
The investors in Canada who are seeking a high yield of dividend have to first ensure that the dividend is a safe one. The dividends must be supported fully by earnings; otherwise it becomes a risky proposition. If the dividend income is less than 2/3rds of the total earnings, then it can be regarded as safe bait. The dividend stocks need to be supported by steady balance sheets.
Investors must consider the prospects and potentials for growth of a company before investing in the stocks of that company. A major portion of the returns that are obtained from high yielding stocks is from capital gains.
Those companies in Canada that pay dividends amounting to less than half of their total earnings are reliable.The price of a stock also determines the Canadian stock dividend.
The following ratios are useful tools needed to determine the feasibility of the price of a particular stock:
- Price to sales ratio
- Price to earnings ratio
- Price to book value ratio
- Price to cash flow ratio
Canadian stock dividends are received from those stocks that return a portion of their earnings back to the shareholders. Such stocks in Canada are mainly found in sectors like banking, utilities, oil and gas and mining. A portion of the share price of the stocks is paid out as dividend. These stocks can also act as a source of income for the people investing in them. The average stock dividend yield in Canada ranges between 2% to 20%.
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Last Updated on : 26th August 2013