How Individual Investors Analyse The Best Available Australian Dividend Stocks

For community members who are not part of a larger group might be overwhelmed about finding the best available Australian dividend stocks alone.

Surely this is a task that requires input from a number of sources?

The fact remains that anyone can make gains in this industry so long as they learn the lessons of others and follow sound advice.

Time to see how individuals can analyse the best available Australian dividend stocks.

Outline Financial Targets

The way to figure out where the best available Australian dividend stocks are located is to firstly take a step back from the process and recognise what goals and objectives are in play. Whether it is an investment in property or a business interest, paying off a loan, building a group portfolio, creating a secondary stream of income or simply being able to enjoy retirement, the objectives of the client will help them to shape how proactive or cautionary their dividend stock behaviour will be. Establish those frameworks from the outset before looking at other criteria points.

Examine Business Health

The best available Australian dividend stocks won’t be too different in analysis from traditional stock options. Ultimately, the diligence will be reviewed according to the health of the enterprise. From the debt-to-equity ratio, the balance sheet, the liabilities tied to the organisation and the investments in partnerships and new technologies, these underlying metrics and announcements go a long way to illustrating the success of the business. This is where participants can find out if they have something viable on their hands with each dividend cycle.

Assess Key Dividend Metrics

Australian investors who are seeking quality returns with dividend stock options need to look at five distinct metrics:

  • Dividend yield
  • Earnings per-share (EPS)
  • Price-to-earnings (P/E) ratio
  • Dividend payout ratio
  • Cash dividend payout ratio

This is the only way to find out the annual yield as represented as a percentage of the stock price, how much they pay as a percentage of company earnings and what the value of the product happens to be. There are more in-depth analytics involved, but this is a perfect statistical framework that allows investors to compare and contrast competing dividend stocks on merit.

Looking at Long-Term Trends Only

Individual investors could easily be distracted by the daily trackers and the hustle and bustle of news coverage. However, when it comes to finding the best available Australian dividend stocks, the only information that is valuable will be the trends that showcase long-term growth and development. Remember – this is an annual process that has a limited window for delivering the goods, so it is incredibly important to avoid high volumes of news and only focus on credible sources with long-term analysis.

Consider Tax Implications

It is important to note that even the best available Australian dividend stocks are still subjected to tax implications. Depending on the tax bracket that the investor is situated in, they will require taxation. From qualified dividends that are subjected to traditionally lower tax rates, there will also be ‘ordinary’ and non-qualified dividends that are taxed to a higher level than their counterparts. By researching these parameters and finding out how much they are taxed, that will add value to the proposition.

Engage Stock Specialists for Advice

Opening discussions with industry specialists is a great approach to finding out the best available Australian dividend stocks. There is often a level of hesitancy and even scepticism about the way that they operate, but researching their credentials and having generalised talks can alleviate a lot of issues that people have in this environment. Allow them to set a framework and align personal goals with dividend investment tactics.

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