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I wouldn't say any are particularly good. If you're buying stock or paying dividends that's money you're not using for investment so the use of capital in that way isn't a very good sign imo.
what is interesting is dividends have increased to the highest levels since 1998 with a record increase of 17.8 billion dollars in increased dividends payed out just 1st quarter. the 4th quarter may be even bigger.
all dow stocks pay dividends and 84% of the s&p 500 does too.
but according to a study done by howard silverblatt at s&p those dividends have been coming at a price as they go up and up..
a good part of that capital from free cash flow is gone forever and no longer available for compounding.
mid-caps and small caps who pay little in dividends have been far and away providing far better compounding and use of investor money for much greater returns..
in fact one of the least efficient ways to grow investor money now is paying it out as a dividend.
as chuck akre said ,free cash flow in a company can be used to compound by buying back its own stock, investing in its own company or buying other companies . cash flow paid out as dividends loses its compounding ability and much of it is gone forever and can no longer compound.
many of the great companies in the s&p 500 have lagged behind their non dividend payers in the midcap and small cap markets who now seem to be much more efficient at generating compounding on investor money.
except for 2014 when nothing but the s&p mattered , mid-caps and small caps have compounded the last 5 years at rate of 5-6% higher then their dividend paying cousins.
what is interesting is dividends have increased to the highest levels since 1998 with a record increase of 17.8 billion dollars in increased dividends payed out just 1st quarter. the 4th quarter may be even bigger.
all dow stocks pay dividends and 84% of the s&p 500 does too.
but according to a study done by howard silverblatt at s&p those dividends have been coming at a price as they go up and up..
a good part of that capital from free cash flow is gone forever and no longer available for compounding.
mid-caps and small caps who pay little in dividends have been far and away providing far better compounding and use of investor money for much greater returns..
in fact one of the least efficient ways to grow investor money now is paying it out as a dividend.
as chuck akre said ,free cash flow in a company can be used to compound by buying back its own stock, investing in its own company or buying other companies . cash flow paid out as dividends loses its compounding ability and much of it is gone forever and can no longer compound.
many of the great companies in the s&p 500 have lagged behind their non dividend payers in the midcap and small cap markets who now seem to be much more efficient at generating compounding on investor money.
except for 2014 when nothing but the s&p mattered , mid-caps and small caps have compounded the last 5 years at rate of 5-6% higher then their dividend paying cousins.
The growth curve of a company will usually flatten out the bigger a company gets so whether a company pays dividends or not small and mid-cap companies will usually have greater potential for growth than their large cap peers so that's not a apples to apples comparison.
I don't think anybody will argue that the best way to increase growth is a good well executed capital expenditure strategy. My poll is strictly to find what people think is the best way to increase value among those tactics that return capital to shareholders.
I will say anything other than handing me back my money as a dividend . But if they feel they can't grow it then it is a moot point
Do you really expect companies that pay dividends to just suspend them ? If a company can offer high growth they probably will not pay a dividend .There are plenty of stocks that don't pay dividends, so good luck with that...
I said the opposite , even if they wanted to suspend paying dividends because they found a better use for the money they can't , the share price would likely plunge and it would be taken negatively by the markets at that point . .
but that does not mean that paying that dividend is the best use of the money .
I voted for recurring dividends because I believe it's the best of the choices presented. In reality, a good capital allocation strategy will feed all of the drivers of shareholder value (other than one-time special dividends, which are an anomaly in my opinion to be used in certain situations like a sale of a large piece of the company).
Recurring dividends are good discipline for managers to make sure they make enough money in the business to be able to make investments to grow the company. R&D and sales investments are always necessary to keep a company's products/services attractive and up to date and to reach new markets. M&A doesn't always make sense, but often does and certainly there is a need to allocate capital there as well.
None. Profits add more value. You are talking about how the company distributes the profits.
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