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Why Are Companies Hesitant to Cut Dividends?

Oftentimes company stock prices are held up by the dividend. Investors seek good, reliable, stable investments. Companies that have built a history of solid dividends for 10, 20, 30 years are hesitant to destroy that history for a short term problem and lose their reputation. Also, many older investors depend on the income from dividends. Dropping the dividend will send those investors away, hurting the stock price even more.

That being said, I am concerned about companies that borrow money to pay a dividend. It takes quality management to find the right balance. For some companies, it is the right approach. For others, it's covering up serious problems.

Caterpillar: Does It Deserve the Goldman Downgrade?

CAT looks good to me, but I bought at 32 and 36. Good yield, solid, quality company, and it will eventually make money (already has for me). If Goldman is right, I'll probably buy some more.

Great Shorting Opportunity, Care of Obama

Short term or medium term? When CAT sells with a PE of 6 and a 5% dividend and less than 50% payout ratio, it could be a good long term (5 year) investment. Similar for DE. OSK was even better.