04-28-2015, 10:01 AM
(04-27-2015, 11:24 PM)Dividend Watcher Wrote: I often wonder how/why the European companies evolved to only paying once or twice a year and often base it on a percentage of earnings whatever they may be. Maybe the better question is how did the North American companies end up paying quarterly for the most part and more seemed to be focussed on a consistently increasing dividend and let the payout ratio fluctuate. Alas, that's a philosophical question for another day.
Why not today?!
I sometimes think that the European model, if that's what we can call it, makes a lot more sense from a corporate perspective. I imagine it would free the company to focus more on the long term health and growth of the company. Paying a fixed amount, as opposed to a percentage, can put a lot of pressure on a company as earnings inevitably fluctuate. Of course this "American" approach has distinct advantages for us dividend growth investors -- it makes our ride much more smooth and predictable.