I have been reading posts by fellow financial bloggers and articles online pertaining to investing. Every so often I would come across the term investing in dividend stocks. I don’t consider myself good at evaluating dividend stocks. Nevertheless, I hope to use this post to sort out my thought process. Feel free to correct me on any mistakes you see. How to evaluate dividend stocks My general view is that these are typically mature companies’ stocks, which typically choose to distribute portions of their free cash flow to investors in the form of dividends rather than invest for growth (given the lack of possible further expansion). There are many ways to evaluate these ‘dividend stocks’. Yes, it is important to study the business of the company and make an intelligent forecast of the future prospect of the company. However, there is always a limitation in accurately predicting how policies may ......