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High payout ratio is a warning sign
A payout ratio above 80% is not a sign of a generous company, but an indicator of potential business degradation. When a corporation distributes almost all of its net income to shareholders, it deprives itself of resources for capital investment and development.
Instead of modernization or expansion into new markets, money goes into maintaining the status of a "dividend aristocrat." Ultimately, this strategy leads to technological lag and an inevitable dividend cut in the future.
A company focused on dividends rather than growth is a candidate for removal from your portfolio.
#Stocks #Dividends