How we would know whether a company is a stable growth company or not?
2 Answer(s)
Binny
Based on the usual criteria to pick stable-growth companies, your list seems to fit in. Isn't a growing Free Cash Flow also part of picking such stable growth companies. I feel that is important.
I personally dont have enough knowledge to recommend atable growth companies. However, this article has a few stable growth companies - http://seekingalpha.com/article/321130-7-high-dividend-stocks-with-stable-growth-rates
Jul 15 2013 02:15 PM
I personally dont have enough knowledge to recommend atable growth companies. However, this article has a few stable growth companies - http://seekingalpha.com/article/321130-7-high-dividend-stocks-with-stable-growth-rates
Yasar
I use Gorden dividend Growth Model to value equity of stable growth company. The formula for this model is as follows:
stock price = D/(K-G)
Where:
D = Expected dividend per share one year from now
k = Required rate of return for equity investor
G = Growth rate in dividends (in perpetuity)
In my calculation I am getting -ve stock price because my K is less than G. Is it feasible to have K less than G? What would I do to over come this issue because I can not change K and can't change G.
Jul 16 2013 10:15 AM
stock price = D/(K-G)
Where:
D = Expected dividend per share one year from now
k = Required rate of return for equity investor
G = Growth rate in dividends (in perpetuity)
In my calculation I am getting -ve stock price because my K is less than G. Is it feasible to have K less than G? What would I do to over come this issue because I can not change K and can't change G.