One thing the financial crash taught me was to value cash flow! Looking forward, sustainable dividend yield is one of my chief criteria for stock ownership.
Companies that retain 100% of earnings are gambling that incremental investment will continue to grow earnings at sufficient ROI to warrant reinvestment. I prefer to take some cash off the table and decide for myself whether or not I want to reinvest.
The Shrinking Universe of Dividend Aristocrats [View article]
When times are tough rational agents reduce expenditures, work harder, and conserve cash. Rational companies in this environment should reign in dividend payments, hoard reserves, and take advantage of competitive weaknesses in their product markets.
The bad companies are the ones that attempt to retain dividend levels for show, or for the sake of it. Be careful of this sort of irresponsible management.
When analyzing dividend yields for long-term investors, try to think about how the company will emerge from the downturn. If stronger, or generally in tact, consider pre-downturn dividend streams in your calculations.
Screening for Dividends [View article]
Companies that retain 100% of earnings are gambling that incremental investment will continue to grow earnings at sufficient ROI to warrant reinvestment. I prefer to take some cash off the table and decide for myself whether or not I want to reinvest.
The Shrinking Universe of Dividend Aristocrats [View article]
The bad companies are the ones that attempt to retain dividend levels for show, or for the sake of it. Be careful of this sort of irresponsible management.
When analyzing dividend yields for long-term investors, try to think about how the company will emerge from the downturn. If stronger, or generally in tact, consider pre-downturn dividend streams in your calculations.