Stifel Nicolaus Stock: A Look At The St. Louis Gem Investment

There is a reason why many long-term investors that want to compound their wealth at an exceptional rate—usually 12% annually or better over long blocks of time—tend to gravitate towards companies that are classified as “small cap” or “mid cap” compared to their large-cap peers. Something like AT&T makes $128 billion revenues per year—the kind of asset that acts a stable foundation for a portfolio because of the reliable 5% dividend yield that inches upward each year—but the dividend payout ratio, debt load, and high existing revenue base would make it ill-suited for someone, say, looking to make an investment with a chance of compounding in the 12% or 13% zone. In terms of basic math, it’s much easier to go from $1 billion in profits into $10 billion in annual profits than it is to convert $10 billion into $100 billion.

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