should investors avoid companies that pay declining dividend

2008-05-04 5:51 pm

should investors only pick companies that demonstrate the ability to continuously increase their dividend payments year in year out? since the market prices generally reflect the present value of the dividend streams and a negative dividend growth will translate into future stock price drop while a positive dividend growth will certainly fuel future stock price run up.
Is this statement right....if not please explain why..thank you

回答 (1)

dryerpie

2008-05-04 7:32 pm

✔ 最佳答案

just depend. take 5 and 11 as an example, their dividend ratio has been declining for several years? does it mean they are bad? Not really.

You should find out how they make use of the capital. 11 starts investing in mainland China, the rate of return is very suprising. it keeps ROE at least 25% for several years.

5 invests other new developing countries.

In other words, declining dividend rates is look forwarding company growth.

the factors of the present value of stock are stock price, dividend and growth rate.

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