Personal Financial Planning 13th Edition by Lawrence Gitman,Michael Joehnk,Randy Billingsley

Exercise 35

In this chapter, we learned that common stock is often placed into various categories-blue-chip, growth, income, and so forth-and referred to by its size, such as large-, mid-, or small-cap. In this project, you'll examine and compare the returns on various types of common stock.
Common comparisons include:
• Large-cap versus mid- or small-cap
• Blue-chip versus speculative
• Growth versus income
• Cyclical versus defensive
Pick any two combinations from the foregoing list, and then select a stock to represent each of the categories included in your choices. For all four of your stocks, obtain information on:
• The company's EPS
• Growth in dividends per share
• Dividend yield
• P/E ratio
• The stock's beta
In addition, use the formula given in this chapter to compute each stock's approximate yield for the past year, based on what the stock is trading for today versus the price it sold for a year ago. Be sure to include any dividends paid over the past 12 months. You can obtain this information from financial newspapers or from online sources, such as http://finance.yahoo.com.
Compare and contrast the performance and characteristics of the stocks you've chosen. Based on your findings, does the type of stock you own make a difference Which type or types are the most suitable for your investment purposes