Why Cisco's Dividend Makes It a Must-Own Stock
Published Tue, 22 Mar 2011 on The Motley Fool

Yes, they can (own the stock)When Citigroup eliminated its dividend in 2009, many mutual fund managers and other institutional investors were required to sell the stock. That's because their investment policy only permitted investments in dividend-paying stocks. The mandatory rush for the exits when a dividend is eliminated can really punish a stock's price. In contrast, cutting the dividend to $0.01 may have spooked many investors out of Citigroup stock, but the penny dividend didn't force them to sell. They could even decide to buy more. Any dividend -- even if it's just $0.01 -- opens up a whole new class of potential buyers for a stock ... and it's not just value investors.... Read more