No dividends may just be a good thing for investors

There are many investors who take dividends very seriously. They invest only in companies that have a good dividend history and avoid others that are not generous enough. But a high dividend payout ratio may not always be in the best interest of investors. This is an insight that is reinforced by Warren Buffett time and again. Busting the myth A healthy dividend payout is often lapped up by the markets. The stock gets a thumbs-up and all parties - the company and its shareholders - are happy about the outcome. But dividend largesse may not always be in favour of investors. Companies could deploy that cash into existing growth opportunities to remain competitive and in the game. According to Buffett, a company can utilise its cash in four ways. First, it could re-

This article was originally published on April 28, 2020.