Having sufficient financial resources is important to fund one's continuing education, training, and self-development. Investing in stocks is one means to ensure personal access to financial resources. Pick two publicly traded stocks that interest you, healthcare and water. Calculate and report the stocks' dividend yield (on common stock), price-earnings ratios, dividend payout ratios, internal cash flows, and free cash flows. Interpret the findings. Which of the two stocks is a better investment for you and why?

In your response to classmates' posts, compare your ratios and investment choices with your classmates. Which investments are the best choices based on your personal financial goals?

Dividend Yield on Common Stock	Annual dividends per share divided by Current market price per share	A measure of the return that shareholders receive in the form of dividends. A "typical" dividend yield is 2-3%. The dividend yield for fast-growing companies is often below 1% (maybe even 0%); the dividend yield for slow-growth companies can run 4-5%.
Price-earnings ratio	Current market price per share divided by Earnings per share	P-E ratios above 20 indicate strong investor confidence in a firm's outlook and earnings growth; firms whose future earnings are at risk or likely to grow slowly typically have ratios below 12.
Dividend payout ratio	Annual dividends per share divided by Earnings per share	Indicates the percentage of after-tax profits paid out as dividends.
Internal cash flow	After-tax profits + Depreciation	A quick and rough estimate of the cash the business is generating after payment of operating expenses, interest, and taxes. Such amounts can be used for dividend payments or funding capital expenditures.
Free cash flow	After-tax profits + Depreciation - Capital expenditures - Dividends	A quick and rough estimate of the cash a company's business is generating after payment of operating expenses, interest, taxes, dividends, and desirable reinvestments in the business. The larger a company's free cash flow, the greater is its ability to internally fund new strategic initiatives, repay debt, make new acquisitions, repurchase shares of stock, or increase dividend payments.