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10 Most Important Metrics for Dividend Investors

By Matthew Frankel, CFP® - Oct 26, 2015 at 8:20AM

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Don't buy your next dividend stock until you know the right numbers to look at.

When evaluating stocks, there are literally hundreds of different metrics you can use, ranging from the basic to the specialized. Some metrics carry more weight than others, and this is especially true when evaluating dividend stocks.

For example, if a stock's payout ratio, dividend-growth rate, and interest coverage look bad, I don't really care about metrics such as earnings per share, or the actual amount of the dividend payment. With this in mind, here are 10 of the most important metrics that all dividend investors should know and use when choosing stocks to invest in. I'll use two of my favorite long-term dividend stocks, Johnson & Johnson ( JNJ 1.38% ) and Wal-Mart ( WMT -2.48% ), to illustrate what they mean, and what they can tell you about a dividend stock's merits as an investment.

All Johnson & Johnson and Walmart data was obtained from TD Ameritrade and is current as of 10/21/2015.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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Stocks Mentioned

Wal-Mart Stores, Inc. Stock Quote
Wal-Mart Stores, Inc.
$137.14 (-2.48%) $-3.49
Johnson & Johnson Stock Quote
Johnson & Johnson
$158.08 (1.38%) $2.15

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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