In these volatile times many investors are taking solace in dividend stocks. But if the overall market turns, you'd probably prefer not have a deeply indebted company in your portfolio. That's why it's a good idea to dig a little deeper when you're confronted with dividend ideas. Of course, debt financing isn't always a bad thing.
Most companies use some form of debt to finance their day-to-day operations. By doing so, a company can invest in new business opportunities without asking its shareholders for money.Although there are many exceptions to the rule, it's usually the case that lower-debt companies are less risky than high-debt companies. And when the market starts drifting lower, it's always good to have a couple of low-debt names among your holdings.
Source: Motley Fool
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Posted by D4L | Sunday, December 25, 2011 | ArticleLinks | 0 comments »________________________________________________________________
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