Value Investing News

Management typically evaluates short and mid-term economic and business conditions when they decide on allocation of limited resources. Cash is one such resource, which could either be reinvested back in the business, or returned to shareholders. Companies typically achieve some optimal balance in allocating cash flows from earnings between owners and the business. It is interesting to note than when management expects rosy business conditions in the next two to three years, dividends have a higher chance of getting raised.

• http://www.dividendgrowthinvestor.com/2010/08/24-dividend-paying-companies-confident.html (234)