How can I predict what earnings will be for a particular stock including dividend distribution?

Answer 1

You check up the earnigns growth rate. The company gives a forecast which is usually reliable. You multiply this years earnings by that percentage and add to the present earnings which will give next years predicted earnings. Finance people have a bit more involved method. They take up the Revenue growth from historical data and using a method called 'Walds' method they regress to get the earnings growth rate. The method is little involved to explain here since you need 13 to 15 years revenues to find out the expected growth rate for investments. Still I will try to explain. Make a table of 15 years revenue. Keep numbering them1 to the 7. Leave out the middle number. Then nubmer from 7 to 1. Multiply the revenue figure of each year by the index number given above. Now you have two sets of data. 1to7 and 7to1. Add up the two sets.
now the formula,
First sum x e^r = second sum
e^r=second sum/first sum
Take natural log on both sides
r. log e= log(second sum/first sum)
lge e = 1
so you get r the revenue growth rate. You multiply this by the present revenue and add to it to get the next years revenue. Then getting earnings you mean net income is easy. This is the most conservative method to calculate growth rate for investements.
For dividend distribution historical pay out rtios the companies will stick to generaly.

Answer 2

You buy a stock without dividends because you want your investment to grow. Everytime a dividend is paid, the stock price drops the same amount. The company also has to pay to have checks printed up and mailed out. When you receive a dividend, it becomes taxable. If your stock price just grows, there is no tax accessed on your gains until you sell the stock. Someone might buy a stock without earnings, if future earnings are expected. For example, a ski resort company that had no earnings over the summer, and the stock price is low now, and is expected to rise after winter earnings...

Answer 3

If there was a true answer to this question we would all be rich right now. The best way you can predict the earnings of a stock is to research, research, research and when your finished research again. I have owned long term stocks, but have since sold out and now deal with very short term volitile stocks that can raise and drop 80% or more in a day. At this point I am averaging over a 50% return. My return would have been higher, but a took a nasty hit, due to the fact I did not set my auto sell. Hope this helped a little