What if we wanted to look at stocks that didn't pay a dividend. When you are looking into growth stocks you have to understand that you are losing that dividend cushion. Dividend stocks are a beautiful thing because your overall stock price can go down but your dividend payments can bring you back up. Some of the obvious front runners would be Google or symbol: GOOG.
Google has a current market cap over 242 billion dollars. You could always buy some BRK.A but that will run you about $140,800 a share. Berkshire Hathaway has a market cap of 233 billion dollars. These are giants in the industry. When you are looking into a growth stock you just might make a good chunk of money with these or you could try small cap stocks. When you buy a small cap stock you have a significant amount of growth potential if the company ever truly takes off.
Facebook stock (Symbol:FB) is another one that doesn't pay a dividend but many people are very interested in. Facebook currently has only a 0.11 EPS which make their P/E ratio 267.34 which is ugly in comparison to Google's P/E ratio of 23.12. It's pretty clear that currently Google is the far better investment even though some might be more likely to buy Facebook stock just because the price is lower in terms of share price.
It's funny how people can react to share price as if the more shares you get the better deal you are getting. That is simply not the case but honestly many people I have talked to can't seem to understand that and they love to buy anything that is below 30 dollars just because they like to have 100 shares or a company instead of 10 shares or a stock that costs 300 dollars. Once you can understand how many shares of a company are issued than you might understand why a lower per share price really doesn't mean that much. It's really all about how much are you getting for your money in terms of value. That's some pretty basic stock market investing logic but some newer investors have trouble understanding it.
Autozone inc. (symbol:AZO) also pays no dividend but could be seen as a good investment because of the current P/E ratio 14.85 with a share price of 360.85 there EPS is over 24.xx and they are continuing to do well in the auto maintenance industry. AutoZone still has room to grow and they can continue to make more money. They are smart and offer all of the services necessary to keep the customers happy. They keep a clean and organized store unlike some of the other local auto parts stores. These are thing that you should take in to account when investing. This is what separates them from the competition and the reason that they will continue to make money. I always look at companies from the customers point of view because that tells me if they are making people happy. Making customers happy is what keeps them coming back and what keeps the money rolling in.
Dollar Tree (symbol:DLTR) continues to prove that making money with cheap products is possible. They sell everything for a dollar and it works. They make taking care of your home easy with all of the cleaning supplies you need plus everything else you might need. You could probably only shop there and have most of your essentials. Their current share price is 39.62 and their P/E ratio is at 15.94 they are getting close to that point where they will be considered a bargain but not quite there yet. If I see them at 33.xx or lower I will buy a fair amount of shares. This is a good company because it can really thrive while in a down economy but can also sustain in a strong economy.
So it's not always necessary to buy dividend stocks but stocks that pay a dividend can really help you to hold them long term. Most of the time if a company is not paying a dividend I do not buy them just because it usually makes me want to sell them as soon as I see some gains to get out of it and buy a dividend stock. That's why dividend stocks are so great because they give you the comfort of knowing you are making money while your holding shares.
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