7 Cash Rich Stocks That Offer Safety in Any Market
With many Stocks now trading at all-time record highs, investors are looking for capital appreciation from their investments.
However, many Stocks have moved higher without earnings or revenue growing, and while this may appear positive, it raises an important question.
Is this run sustainable?
As an investor, I ask myself this question all the time.
I like to invest in companies that can grow their earnings and revenue.
But most importantly, I want to invest in companies that can grow their earnings and revenue over time. In other words, I want to invest in companies that can grow their earnings and revenue and do so over time.
The problem with using just these two metrics is that it ignores the fact that earnings and revenue are a function of many other factors.
For example, earnings and revenue can be affected by:
Management of capital
Management buying stock
Management selling stock
Management buying back stock
Management issuing stock
Management exercising stock options
Management repurchasing stock
Management's salary
Management's bonus
Management perquisites
Management's perks
And others
The point is that earnings and revenue are a function of many factors.
While earnings and revenue are important, they don't tell the whole story.
For example, earnings can be manipulated through accounting gimmicks such as backdating stock options, and revenue can be manipulated through acquisitions.
Knowing this, in order to invest in companies that can grow their earnings and revenue, I believe that investors must also focus on other fundamentals.
One of the factors that I believe is most important is cash.
Cash rich companies can buy back stock, pay dividends, make acquisitions, expand their operations and enter new markets.
In fact, companies that can grow their dividends are able to produce an income stream that can last for a very long time.
For example, if a company has a $1 per share dividend, and a 10% yield, and that company grows earnings by 5% per year, the stock price would double over a 30-year period.
In addition, companies that can grow their dividends are more attractive to income investors.
Dividends are important. Not only do dividends allow investors to receive an income stream, but rising dividends also indicate that a company is growing its earnings and generating cash flow.
This combination of fast-growing dividends and high appreciation potential makes dividend growth Stocks special.
The seven cash rich companies listed below all have dividend yields of at least 5%, and I believe that all of them can grow their dividends over time.
The seven cash rich companies listed below are:
Realty Income Corp is a real estate invest trust.
Realty Income Corp invest in the real estate markets of United States and Canada.
The company owns 4,400 properties.
Realty Income Corp leases its property and collects rental payments from tenants, as well as from real estate tenants.
Realty Income Corp's dividend yield is 6.8%, and its dividend payout ratio is 72%.
Realty Income Corp has raised its dividend for 50 consecutive years.
REITs are special types of companies that are required to return at least 90% of their taxable income to shareholders. Because of this requirement, REITs tend to have the highest dividend yields.
In addition, because REITs are required to distribute at least 90% of their income, they have little flexibility in terms of how they deploy their capital.
invest requires flexibility. In other words, investors must be able to adjust their portfolios based on evolving market conditions.
Because of their special tax status and limited flexibility, REITs
