Declared Dividend Intentions
is a useful tool
Take note when a company declares its
dividend intentions
When considering a dividend paying company it make sense to ascertain what its future dividend intentions are. Not often, but sometimes, companies actually announce their new dividend policy for several years going forward.
Why do we like companies with rising dividends?
When a company decide to increase its dividend it's signalling to its shareholders that it's confident that it will be able not just to continue paying a dividend, but also a rising dividend.
Such decisions are not made lightly. The last thing a shareholder-focused company wants to do is to create uncertainty by paying an increased dividend in one year, and announce a dividend cut the following year.
Be aware though that a dividend increase in its own right is not a 'safe' signal that it will be maintained. Just remember some of the banks having boosted their dividends for a number of years for these then to be omitted in 2008 and 2009.
As we said before dividends are not guaranteed.
Nevertheless, by investing into the shares of companies with declared dividend intentions you may gain access to steadily rising dividends over time.
Examples of companies' dividend intentions
Occasionally, companies announce their dividend intentions to increase (or decrease!) dividends for several years going forward.
When they do income investors should take note!
Often these are the kind of companies that have long-term predictable earnings, a long dividend track record, and have a tradition in communicating to the market and their shareholders issuing statements to that effect, such as the examples below:
Examples of dividend cuts and cancellations
Be aware, that as a result of some unforseen catastrophe, previously solid dividend payers may have to cut or even cancell future dividends. For instance:
WE WOULD LIKE TO POINT OUT, THAT:
1.√the above mentioned companies are solely used as examples of UK listed company's future dividend intentions and are not share recommendations. Early Retirement Investor nor EMAR Publishing are registered as an investment advisor or as an independent financial advisor and do not provide individualised advice.
2.√the price of shares and investments and the income derived from them can go down as well as up, and investors may not get back the amount they invested.
3.√where the information consists of pricing or performance data, the data contained therein has been obtained from company reports, financial reporting services, periodicals, and other sources believed reliable.
4.√data computations are not guaranteed by Early Retirement Investor.com or any of the data providers and may not be complete.
5.√The editor or contributors may have an interest in the share mentioned.
6.√Dividend yields move up and down. As a company’s share price increases the dividend yield falls. And vice versa: if the share price falls the dividend yield increases.
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