Debating Dividends: What Would You Want Your Company to Do With Its Excess Cash?

For more than a year, there has been spirited discussion on Seeking Alpha about the merits of dividends. Camps of dividend-lovers, dividend-agnostics, and dividend-haters have formed. The question comes down to what you want a company that you own to do with its last dollars of earnings, its “excess cash.” Should the company distribute some of those dollars as dividends or not? This should not be an emotional topic, but it has turned out to be one. Some seem determined to prove that their approach is the one and only correct approach. Others state that they are willing to “agree to disagree,” only to get mocked for being willing to let it go at that. Still others reason that the way one thinks about dividends may be a function of a particular investment strategy or one’s stage in life, and that multiple views may be valid depending on circumstances. I... Read more

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