One in Three Investors Cite Growth as Most Important Quality to Look for in a Stock

This week’s Sentiment Survey special question asked AAII members what the most important qualities/characteristics they look for in a stock are. Slightly more than one out of three respondents (35%) say growth in revenues and/or earnings. Quality—including a company’s management, its financial strength and business stability—is listed by 27% of respondents. Nearly 23% of respondents seek out low valuations. Approximately 20% consider a stock’s chart pattern or its price momentum. Dividends, particularly growing dividends, are a top priority for 19% of respondents. Competitive advantages such as a moat are required by 11% of respondents. Several respondents list more than one attribute.

Here’s a sampling of the responses:

• “Dividend yield and dividend growth. I’m looking for above-average income growth.”
• “Growth. If the company is not growing, the stock price probably won’t grow either.”
• “A ‘moat,’ low or no debt, ongoing growth and a price within my current range for the stock.”
• “Relative strength in relation to the market.”

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