“The best thing a company can do with a profit is reinvest it at a high rate of return.
Very Interesting!
Thanks!
Dividends are an output, not a goal. What matters is ROIC vs reinvestment opportunities. Misreading lifecycle leads to overpaying for “yield traps.”
Well said, it’s all about ROIC and reinvesting, if that’s not done well, then no growth, dividends, or buybacks.
Yes, exactly cash flow generation is required for dividend payments.
Very Interesting!
Thanks!
Dividends are an output, not a goal. What matters is ROIC vs reinvestment opportunities. Misreading lifecycle leads to overpaying for “yield traps.”
Well said, it’s all about ROIC and reinvesting, if that’s not done well, then no growth, dividends, or buybacks.
Yes, exactly cash flow generation is required for dividend payments.