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Brexit, UL and RDS.A taxation
#3
(07-09-2018, 09:06 PM)crimsonghost747 Wrote: Offtopic: Regarding the scrip dividend.
Does anyone else understand the point? I mean I get it, they didn't have much cash and they wanted to keep their history of not cutting the dividend. But basically what it did was increase their sharecount when things were bad and the share price was around 20e-27e. And now that everything is good, they will be buying back those shares from the market at 30e+.
I think the company lost insane amounts of money doing this, simply because they wanted to keep the streak alive. I guess this is a good example of why companies can be seriously hurt when they feel like the dividend can't be cut, even if the fundamentals are telling you to cut it.

This is such an interesting thing. As committed as I am to DG investing, I've always thought that it doesn't make a lot of sense from a corporate perspective. Much more sensible to have a stated policy of paying out a specified percentage of profits as dividend. This avoids the need for debt or accounting shenanigans just to keep a streak of dividend growth alive. That said, I'm happy with the (general) predictability of the dividends and raises, and it does to some extent motivate management, I suppose.
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Messages In This Thread
Brexit, UL and RDS.A taxation - by RyanCMason - 07-09-2018, 08:18 PM
RE: Brexit, UL and RDS.A taxation - by Kerim - 07-11-2018, 05:30 PM



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