16 6588 142 na williams coal sm gs 544 6617 184 na

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Unformatted text preview: gs 1.81% 76.39% 0.43% 3.80% NorthWestern Corp. 3.74% 78.40% 0.81% 2.70% Redwood Trust Inc 5.35% 79.25% 1.11% NA The fundamental growth rates are low for every one of the firms, partly because these firms have high payout ratios and partly because of low returns on equity on their investments. For those firms where analyst estimates of growth are available, the expected growth rates in earnings per share over the next 5 years are low. In fact, if you require firms to have expected fundamental growth rates of 3% or higher, the only three firms that make the final cut are two real estate investment trusts – Mission West Properties and Koger Equity- and one tobacco firm – Advanced Tobacco. In summary, screening firms for sustainability of dividends and for reasonable growth rates in earnings reduces the original sample of 100 firms to 3 firms. Taxes As has often been said, the only two things that are certain in life are taxes and death. While investors may get a chance to pause and admire the pre-tax returns they make...
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