Ratios and Metrics For Investing in Stocks
A Few Basics For Reviewing Stocks
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
The ticker symbol (or ticker) is the 1 to 5 digit alphabetic code used to identify
the shares of a specific corporation.
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:
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 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.
There are an number of ratios an investor or stock trader may want to consider, click on the links on right toward the top of the page to get more information about each.