Wednesday, December 16, 2015

Financial Thought of the Day December 16, 2015: Dividends Have to Come From Somewhere

It’s best to always look for companies where the dividends come from free cash flow. Companies that pay out less than 50% of its free cash flow in dividends in a full year represent a good rule of thumb. If a company pays out more than 100%, then the company is most likely dipping into the balance sheet or relying on outside sources to fund the dividend.

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