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Strategies & Market Trends : Dividend investing for retirement

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To: RetiredNow who wrote (9261)6/15/2011 3:18:08 PM
From: Kip S  Read Replies (2) of 34328
 
mindmeld,

What your process calculates is the earnings yield, E divided by P. This is just the inverse of the P/E ratio. In your example, your stock has an earning yield of 12% and a P/E of 8.3. If it were paying the same dividend, but it represented 100% of earnings, its earnings yield would be 3% and its P/E 33. Lesson: Look for stocks meeting your dividend criteria with high earnings yield, which is the same as low P/Es.

Realize you may know this already.
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