IF A COMPANY REDUCES THE SIZE OF DIVIDENDS TO INVEST MONEY, THEN MAKE MORE PROFIT, CAN’T THE PAYOUT INCREASE?

If they cut dividends by 1%, afterwards done 10% some-more distinction since of the additional accessible for investment, for example? Is which because shortening dividends competence not be the pointer of bad performance, as well as dividends competence not indispensably be the opening indicator?

{ 2 comments… read them below or add one }

Anthony H May 28, 2010 at 7:27 am

I don’t truley go by the dividend anyways. I’m in a value point of view so I look at earnings, Assets, debt, growth,. Remember (P)rice=(E)arnings x (M)ultiple. I tend to look at companies that dont pay a dividend. A big perormance indicator is the balance and income statement. To tell whether a company is selling cheap is: Assests double the liabillities, multiple 2x is equal or less than the multiple, account payables take up only 20% of company assests(dont want a company that lends to much of its money although its a custom to operate), steady earnings, postion in its market, and inventory. Also another key factor is to discount future earnings. This brings tommorow’s value to today. It helps indicate whether a company is selling at a value or overvalue. I dont know if i’m any help considering i’m only 14 but i do read a lot so my techniques are reliable.

bob shark May 28, 2010 at 8:26 am

No company will drop their dividend , if there is any way of avoiding doing so. It can be the death Knell of a company

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