Guys,
Just came across a beautiful note by Ashwath damodaran on dividends. Comapnies across US, historically have not tinkered with their dividends, inspite of good earnings. Dividends tend to follow earnings, companies only increase dividends when are particularly sure abt future earnings potential...Dividends and stock buyback are both forms of returning money to the shareholder's...A recent trend shows companies are far more inclined towards buying back their stock rather than paying/increasing dividends..since dividends are sticky! once u start paying them...its like getting married..there's no way out...but stock buybacks are like hooking up a girl..you can say no whenver u want to!...Interesting way to explain..
pls post ur views on dividends, marriage, stock buybacks and hooking up ;-)..
Cheers!
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