Cash flow is a company’s operating inflow of cash minus its outflow of cash. It’s calculated by adding net income plus non-cash charges such as depreciation, depletion and amortization. Simply put, it’s earnings without taking into account non-cash charges such as depreciation, depletion and the write-off of intangible assets over time.
Cash flow is particularly useful in valuing companies in industries in which depreciation and depletion charges are based on the historical value of assets instead of current values-industries such as oil and gas and real estate. Note though, that as with any financial ratio or number, you have to look at it in context with many other factors. That’s not to say that there won’t be surprises that affect every company in a particular industry. But well-established stocks have the asset size and the financial clout-including solid balance sheets and strong cash flow-to weather market downturns or changing industry conditions.
In summary, cash flow is in many ways a better measure of a company’s performance than earnings. While reported earnings are subject to accounting interpretation and can be restated in later years, cash flow is a measure of the cash flowing into a company right now less cash outlays.
Investors should always seek out information about cash flow when analysing a stock-but you should also keep TSI Network’s three-part Successful Investor philosophy in mind:
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RUSSEL METALS INC., $28.16, is a buy. Through their shares, investors tap one of North America’s largest metal distributors: the company (symbol RUS on Toronto) serves 33,000 clients at 48 locations in Canada and 16 in the U.S.
This week, Russel and Japan’s Marubeni-Itochu Tubulars America… Read More
FORTIS INC., $55.04, Toronto symbol FTS, is your #1 Income buy for 2021.
The company is the main supplier of electrical power in Newfoundland and PEI. Fortis also owns electrical utilities across Canada, the U.S. and the Caribbean. In addition, the company distributes natural gas in… Read More
Learning the best ways to mitigate investment risk will go a long way toward helping you build a sound and safer stock portfolio
If you want to mitigate investment risk, our best advice is to follow our three-part Successful Investor strategy: Invest mainly in well-established, dividend-paying… Read More
Electronic payment processor PayPal has soared nearly 215% during the COVID-19 pandemic, as the government-ordered shutdown of stores accelerated the shift to online shopping. We see this as the start of a lasting shift in the payments business and that should give PayPal many more… Read More
TELUS CORP., $25.82, Toronto symbol T, is a buy.
Telus is Canada’s third-largest wireless carrier after Rogers Communications (No. 1) and Bell Mobility (No. 2). It also sells landline phone, Internet, TV and home security services in B.C., Alberta and eastern Quebec.
With the January 2021 payment,… Read More
NORTH WEST COMPANY, $36.17, is a buy. The retailer (symbol NWC on Toronto) sells food, and everyday products and services through 244 stores. Those locations are mainly in northern communities across Canada and Alaska. Through your shares, you also tap the company’s operations in remote… Read More
Oil prices continue to rebound from 2020 lows as more parts of the global economy reopen. OPEC’s commitment to maintain its current production cuts also helps support prices.
That’s good news for this high-quality producer, since recent cost cuts also put it in a stronger position… Read More
Improved gold production and selling prices led to a 14% revenue jump for this company during the most-recent quarter.
A new acquisition could add to reserves and the company remains a buy for long-term growth and as a hedge against inflation.
NEWMONT CORP. (New York symbol NEM)… Read More
TELUS CORP., $25.39, Toronto symbol T, is a buy.
Telus is Canada’s third-largest wireless carrier after Rogers Communications (No. 1) and Bell Mobility (No. 2). It also sells landline phone, Internet, TV and home security services in B.C., Alberta and eastern Quebec.
The stock dropped 3% in… Read More
Learning how to pick dividend stocks successfully is a lot easier if you follow these key tips—and warnings
Do you know how to pick dividend stocks for maximum gains? For a true measure of stability, focus on stocks that pay a dividend they’ve maintained or raised… Read More
The Successful Investor Inc. and its affiliate Successful Investor Wealth Management (referred to hereafter as TSI Network) know that you care how information about you is used and shared, and we appreciate your trust that we will do so carefully and sensibly. This notice describes our privacy policy. By visiting websites owned by or associated with TSI Network, you are accepting the practices described in this Privacy Policy.
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We do not collect or disclose personal information, except when it is provided to us voluntarily by the site/store visitor with their consent.
We store subscriber and password files containing personal information securely. These files are stored in secure areas that are not accessible to the general public. We are always working to ensure the security of your personal information.
We are continuously in the process of improving our sites and services. If any new features or policies require a change to this current policy, we will post a clear notice of this change on pages of our site where the privacy policy appears. The principle behind this privacy policy is to collect information with your knowledge and consent.
What personal information do we collect?
The information we receive from customers helps us personalize and continually improve your online experience at TSI Network. TSI Network may collect personal information online for all legal purposes, which include, but are not limited to:
Information You Give Us: We receive and store any information you enter on our website or give us in any other way through sign-up forms or ordering forms for publications and services. You can choose not to provide certain information, but then you might not be able to take advantage of many of our services and features. We use the information that you provide for such purposes as responding to your requests, customizing your web browsing experience for you, improving our website, and communicating with you.
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Does TSI Network Use the Information It Receives?
"Contact Us" and Comment Features: TSI Network encourages visitors to its websites to contact us with questions and comments. Email addresses and other information of persons using these features may be collected in order to facilitate our responses to those inquiries.
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What Choices Do I Have?
Changes to this Policy
This Policy is the sole authorized statement of TSI Network's practices with respect to the collection of personal information through TSI Network's websites and the subsequent use and disclosure of such information. Any summaries of this Policy generated by third party software or otherwise (for example, in connection with the "Platform for Privacy Preferences" or "P3P") shall have no legal effect, are in no way binding upon TSI Network, shall not be relied upon in substitute for this Policy, and neither supersede nor modify this Policy.
TSI Network may revise this Policy from time to time.
Legal Notices and Disclaimers
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