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Invest Right Essay
General Motors is an older more mature company. General motors pays divedends to its stock holders. For years GM produced most of the vehicles sold in the United States. Gas Prices have hurt GM for they produce alot of SUVs. Also the designs have hurt GM for people prefer higher quality foreign cars like Toyota. GM has lost about $15 per and half of its annual dividend. In 2003 dividends were at $0.50 per share. In 2004 dividends were at $0.50 per share. In 2005 dividends were at $0.50 per share. In 2006 the dividends were at $0.25 per share. GM has resently tried to increase their earnings by coming out with newer more stylish products. They are also laying off people in order to save the company money. They are also freezing pensions.
General Motors and Krispy Kreme are similar yet different in the way they do things. They both are coming out with new products to try and raise sales. Krispy Kreme is getting new management. General motors is laying people off and freezing pensions. Investing in a income stock has its advantages and disadvantages. An advantage is that you get dividends and the better the company is the higher your divendend. A disadvantage is that if the company goes under water you lose alot of money and you dividend can be cut down drastically.
If I had to choose between these two stocks I would have to choose between GM. GM seem to know what they are doing unlike Krispy Kreme. GM is taking more steps to earn more money. Krispy Kreme however is a sinking ship! So I would choose GM!
Krispy Kreme is a fairly new stock. Krispy Kreme sold their first stock to the public in the year 2000. The stock pays dividends to its stock holders Right away they were a very popular stock. People thought that Krispy Kreme was a profitable growing company. Through the next few years after the first stock offering more and more people invested in the company. In the year 2003 the companies sales rose rapidly. The number of stores grew by more that 20 percent per year. The sales revenue increased by more than 30 percent per year. The divedends increased over 50 percent per year. This atrracted more investors which made the stock price rise rapidly. The stock peaked at about $40 by the end of year 2003. That is about the same price as earlier in the year. The company blamed this on tho popular carb diet. Weekly sales began to fall, but the company still add more stores. Some stores began to fail. The stock is now at $10 per share. In 2003 the dividends were at $0.80 per share. In 2004 the dividends were at $-2.55 per share. In 2005 the divedends were at $-2.20 per share. In 2006 dividends were at $-0.68 per share. That is a dramatic drop. Krispy Kreme has resently tried to increase their earnings by coming out with new healthier products.