Rewarding Shareholders with Dividends
Dividends, regarded as a key indicator of a company’s financial health and contributing significantly to a stock investor’s long-term wealth, can be a crucial factor in evaluating a company for long-term investment. In today’s market, it’s even more critical to build a portfolio of quality companies with the financial strength necessary to issue dividends. A recent research study found that, in the year after large-cap companies raised their dividends, they outperformed their peers (based on total return) by an average of 1.8 percentage points. Those that began paying dividends for the first time, or reinstated them after a lapse, outperformed…