I think its time to get out of stocks all together. At least here in the states. The DOW has gone no where for us babyboomers. In 7 years you made a paltry 1% per year. Do the math. All the while the US dollar has lost over 165% of it’s buying power to GOLD the ultimate currency of choice.
What companies should do – wait for it now – is what makes sense for that company. If cash needs to be spent to increase employee talent (higher wages), if they need to grow, buy equipment, do research, that’s what they should do. If they are stable, solid and making good money, then you pay dividends. What? Doesn’t anybody say “what makes sense for this company at this time?” when answering these questions?
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SM, no kidding brainiac! I think the presumption in this hypothetical is that cash is available to shareholders and as such, would you rather receive a dividend or see a decrease in the number of outstanding shares?
Personally, dividends, everytime.