Pratibhuti

5 characteristics of quality investment stocks

Strong Balance SheetCompanies with a strong Balance Sheet are in a better position to face adverse market conditions. Always study the ratio of Debt to Equity before investing in a company.Lower the ratio, higher the financial stability of a company.

Profitability ratiosOn studying the Balance Sheet, calculate the various profitability ratios of the company.Eg: Return on investment, Gross Profit Margin etc. A higher ratio than that of its competitors is an indication that the company is performing well.

Good managementA good management has the ability to gauge opportunities and cash in on them.This skill provides financial stability which an investor seeks in the company.So while you check the assets on the Balance sheet, make sure you check this intangible asset as well.

Life cycle efficiencyMake sure the company is keeping up with the global markets and using the latest technology to provide better products and services .The management should be aware of the changing trends and act on them to benefit the company and its investors.

Dividend yield Study the past reports of the company and make sure that the company has a good history of dividend payments. Regular dividend payment is a sign of sound financial growth and an important characteristic of quality investments

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