What qualities do you look for when investing in stocks?


Quick Answer

Company revenue, earnings per share and dividend payout are three metrics that investors use when investing in stocks, according to Nasdaq. These metrics change periodically, and it is important to analyze their fluctuations over time.

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Full Answer

Revenue is important to consider when investing in stocks, as this figure represents income that is earned by a company over a particular period, notes Nasdaq. The change in revenue from period to period signifies whether a company is experiencing growth. In addition, earnings per share represent the portion of a company's profit allocated to each outstanding share of common stock. Finally, a dividend represents earnings that are paid to shareholders. The board of directors for a specific company determines this amount, and it can be paid in the form of money, stock, scrip or property.

Investors can compare financial metrics from either quarter to quarter or year to year, Nasdaq explains. Financial information for all publicly traded companies is available through a database known as Edgar Online, according to the U.S. Securities and Exchange Commission. This database contains recent SEC filings such as the quarterly and annual reports. As of September 2015, the Edgar Online database contains over 20 million company filings. Investors who have access to a computer or the Internet can access these filings to analyze key financial metrics for a particular company.

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