As a beginner to stock investing, you want to start out with very simple and low-risk stock picks. These stock picks aren’t necessarily 10-baggers (1,000% return on your investment) but they mitigate the risk of losing (too much) money. These are stocks that will, for the most part, follow the market. As a beginning stock investor, I feel that it is extremely important to start out with low risk stocks so you can get a feel of how the stock market reacts to certain news, numbers, and rumors. Here are several important metrics you need to look at in order to find a low risk stock as a beginner to stock investing.
Earnings Per Share (EPS) of over $2
EPS stands for earnings-per-share. This number is calculated by taking the profit of a company and dividing by the amount of shares outstanding. In its simplest form, here is what the formula actually looks like: