Stock Appreciation with Dividends
Yesterday I promised I'd get back to you with more reasons to consider Apollo Investment Corporation (AINV) for your portfolio. But first let me mention a few things about "dividend investing". The expression "dividend investing" implies your first priority when picking a stock to invest in, should be it's dividend. Of course that's important, but always remember the dividend is only as good as the company/stock that pays it. So always consider the stock first and the dividend second. Check the link below-it comes from Harry Domash's site winninginvesting.com. (by the way I think Domash is one of the most undervalued brains in the business). You hardcore dividend investors will think you just stepped into the pearly gates of heaven after taking a look at this list of high paying dividend stocks.
This list is a great place to get stock ideas. However, don't be naive enough to think that investing in the ones that pay the most, is the way to go. Experience has proven to me that if you were to choose solely on dividend payment alone, it could be disastrous. Companies can withdraw their dividend payment at anytime, reduce it or for that manner, they could even go out of business.
Anyway, back to Apollo Investment Corp (AINV) and a few more good reasons why they are worth considering.
1. Apollo Investment is one of the few companies in the business development industry that has seen consistent insider buying. Just recently, a high level executive purchased a large number of shares.
2. Earnings growth in the past year has accelerated rapidly compared to earnings growth in the previous three years.
3. With the economy gaining momentum, revenues and earnings should continue to build and result in even higher dividends going forward.
To summarize, with net income expected to rise, strong margins and the stock trading at less than 10 times earnings, upside potential greatly outweighs downside risk. (that's a good thing in any kind of market)
Of course, the biggest selling point is that even if the stock doesn’t perform as well as expected, there is a built in buffer of 9.40 percent.