Monday, November 22, 2010

High Quality Stocks Are Cheap Based On Free Cash Flow

The below chart shows companies’ free cash flows (excluding financials and utilities) compared to BAA corporate bond yields. The ratio is the highest seen in the last 50 years. It is free cash flow that pays investors and one reason we take a hard look at a company's cash flow statement and dividend practices.

From The Blog of HORAN Capital Advisors
Source: Fidelity

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