22:44
Unknown
Here is an example; AT & T today is considered as a Blue Chip stock. When you actually look at this if you are one of the people who follow the Purple Chips it becomes fairly obvious that there is a big difference between a Purple Chip and a Blue Chip Stock. So, let's have a brief look a A & T Stock and what we can learn from analysing the stock to see if it fits as a purplechip stock.
I am drawing a line here to show what happens to the earnings in the last 13 years in AT&T. This is very simple. If you look at this AT&T essentially has been earning about $250 a share for the last 12 years so why would you expect the company to be worth any more than what has its worth 12 years ago.
Now, here is a funny situation; look at the dividends that have been paid. This is the dividend per share. Notice how they have been increasing dividends over the same period they have been increasing the dividends but they haven't made any more money so that tells you something about the companies too. This is a Blue Chip stock. Everyone refers to AT&T as a great stock. They look at the dividends and they say that ‘well! AT&T is a famous stock so why can't be a good stock' It is clearly obvious that why AT&T is not in same class as the Purple Chips stocks.
Purple Chips stocks have steady rising earnings per share and that's a very important concept because how can you pay your dividends or increase your dividends over the time if you don't actually earn a lot of money to pay those dividends. This is an important concept to grasp and it becomes clearly obvious in the case of AT&T. So we call it a Blue Chip stock but not purple chips that we have been looking for. The next example fits the criteria for a Purple Chip.
National Bank
Let's look at a Purple Chip; National Bank; everybody knows the National Bank in Canada. For those people who may not be familiar with this stock they are consider to be one of the better banks that exists out there on TSX index. If you look at the earnings progression for this company it is obviously a Purple Chip. Now we have here is the Earnings Per Share (EPS) and look at how the EPS is rising over the years and it is not an accident that in the last ten years the stock price is more than the double. These are the kind of stocks that you wanted to invest in. Why would you invest in company that is only making the same thing that it was making ten years ago when you can invest in company like this which is actually obvious when you look at them the Purple Chips way? You look at the earnings progression and you look at the dividend's progression. Over the same period the dividend progression has gone up steadily and that's because the earnings have gone up steady. You can't have one without the other and if you do than it's not a Purple Chip.
To learn more about the purple chip method to Stock Picking and having a rewarding stock portfolio check out the purplechips blog
I am drawing a line here to show what happens to the earnings in the last 13 years in AT&T. This is very simple. If you look at this AT&T essentially has been earning about $250 a share for the last 12 years so why would you expect the company to be worth any more than what has its worth 12 years ago.
Now, here is a funny situation; look at the dividends that have been paid. This is the dividend per share. Notice how they have been increasing dividends over the same period they have been increasing the dividends but they haven't made any more money so that tells you something about the companies too. This is a Blue Chip stock. Everyone refers to AT&T as a great stock. They look at the dividends and they say that ‘well! AT&T is a famous stock so why can't be a good stock' It is clearly obvious that why AT&T is not in same class as the Purple Chips stocks.
Purple Chips stocks have steady rising earnings per share and that's a very important concept because how can you pay your dividends or increase your dividends over the time if you don't actually earn a lot of money to pay those dividends. This is an important concept to grasp and it becomes clearly obvious in the case of AT&T. So we call it a Blue Chip stock but not purple chips that we have been looking for. The next example fits the criteria for a Purple Chip.
National Bank
Let's look at a Purple Chip; National Bank; everybody knows the National Bank in Canada. For those people who may not be familiar with this stock they are consider to be one of the better banks that exists out there on TSX index. If you look at the earnings progression for this company it is obviously a Purple Chip. Now we have here is the Earnings Per Share (EPS) and look at how the EPS is rising over the years and it is not an accident that in the last ten years the stock price is more than the double. These are the kind of stocks that you wanted to invest in. Why would you invest in company that is only making the same thing that it was making ten years ago when you can invest in company like this which is actually obvious when you look at them the Purple Chips way? You look at the earnings progression and you look at the dividend's progression. Over the same period the dividend progression has gone up steadily and that's because the earnings have gone up steady. You can't have one without the other and if you do than it's not a Purple Chip.
To learn more about the purple chip method to Stock Picking and having a rewarding stock portfolio check out the purplechips blog
Posted in: Investing
0 comments:
Post a Comment