Ratios and Metrics For Investing in Stocks

A Few Basics For Reviewing Stocks
 

Market Capitalization

This is the total market value of a company’s outstanding shares.

Type of Stock              Market Capitalization Range

Mega cap                   More than $200 billion

Large cap                   $10 billion to $200 billion

Mid cap                      $2 billion to $10 billion

Small cap                  $300 million to $2 billion

Micro cap                   $50 million to $300 million

Ticker

The ticker symbol (or ticker) is the 1 to 5 digit alphabetic code used to identify

the shares of a specific corporation.

Sector

 

Sector refers to the broad business category a stock falls into. There is no standard

sector classification for different sectors. The most common include the following:

  • Basic Materials

  • Consumer Goods

  • Financial

  • Health Care

  • Industrial Goods

  • Services

  • Technologies

  • Utilities

Sector lists sometimes break consumer goods into staples and discretionary categories. Energy is also sometimes separated from basic materials. Telecommunications is also sometimes given its own sector.

It is important to have diversification between sectors when building your dividend growth portfolio.

Volume

Volume is the amount of shares of a stock traded. It is generally calculated as daily volume. There is additional risk with buying and selling thinly traded shares as the bid-ask spreads tend to be much higher. Higher volume typically means you will be able to buy and sell easily.

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Valuation Ratios
Profitability Ratios
Growth Metrics
Stock Analysis Ratios
Alternatives to Earnings
Stock Price Risk Metrics
Risk Return Metrics
Fundamental Risk
Balance Sheet
Balance Sheet Review
Statement of Cash Flows
Technical Indicators
Descriptive Ratios
Capital Asset Pricing Model