Qualities Seniors Should Look For In A Company Before Buying A Stock
Are you considering buying individual stocks? If yes, then you should continue reading this post. Investing in stock is very popular among older adults partly because it is not as involving as compared to most businesses and partly because it’s an old and familiar way of investing savings. Before you buy a stock, you should first of all ensure that the company you are buying individual stocks is stable, reputable, and is more likely to make huge profits in the future. Here are some of the qualities of a good company that you should buy a stock from.
A great company is profitable and can help you save on 2019 Medicare Supplement Plans You should only buy a stock from a company that makes profit. Otherwise, you will end up losing your money. To know whether a company is profitable or not, read its earnings reports and find out how much it reported as its net income in per-share earnings and in dollars. A profitable company’s earnings should be higher than its spending and debts.
- Steady earnings
A great company has steady earnings. Before buying a stock, find out whether the earnings of that particular company is steady. A great company’s earnings growth is steady. Keep away from companies with volatile earnings. In case the company is still young, there should be clear signs that it will be able to sustain a heady growth with time.
- Sustainable competitive position
A company might be competitive now but this doesn’t mean that it will remain competitive in the future. In case you are just a run-and gun investor who is interested in short-term gains, then this quality is not actually important. However, if you are a long-term and serious-minded investor, then you should only buy a stock from a company whose competitive position is sustainable. You don’t want to invest in a company that will be pushed out of business by its competitors because that simply means that you will lose your money.
- A clean balance sheet
A good company that can guarantee you good returns is that which has very clean and impressive balance sheet. To have a clean balance sheet, the company’s earnings must exceed its cost of production, and the earnings must be more than its debts.
- Great leadership
A good company has a great management team that spearheads its growth. The people on top of the leadership of the company you are considering buying stock from should be highly qualified, experienced and reputable.