Value Investing News

You expect your employer to give you a salary increase periodically. Why wouldn’t you expect the same from your investments? One of the most important aspects of a dividend stock is its ability to consistency raise dividends over time.

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.

Most investors are not surprised when a company cuts its dividend. They saw the early warning signs well in advance of the actual cut. Here are three signs that a company is heading toward a dividend cut: