Why Every U.S. Corporation Should Have a Dividend Policy

Major American corporations employ a multitude of psychological and scientific analytical tools to plumb the hearts and minds of customers. In short, the quest is to find out what customers want and to give it to them. By contrast, most companies pay very little attention to what their shareholders want, other than price growth. Doing this they falsely assume that their only constituencies are the Wall Street analysts and money gunners who live or die on each quarter's earnings release. They forget about the millions of individual investors and asset managers who could care less if they beat, meet, or miss their quarterly earnings estimates by a few pennies, yet do care about their dividend payout policies. Most companies believe dividend investors occupy the fringe of their stakeholders and are not worthy of much attention. In short, most American corporations care more about what their customers think than what their... Read more