You Can't Fake Sending out a Check

Everyone loves income. It used to be that publicly traded companies paid dividends as a matter of policy - to reward the owners of the company for taking an equity position in the company. In return for this equity, investors would receive cash flow every quarter in the form of a dividend. In fact, according to a recent article in Forbes Magazine, since 1926 dividends "...have accounted for more than one-half of the total return from investing in stocks."

These days, many companies don't pay dividends, and very few pay a dividend that's worth our attention. But the companies that CAN pay dividends frequently are among the best in the stock market. Dividend paying stocks perform because a dividend payment is one thing a corporate accountant can't fake on the balance sheet. Earnings, wages, revenue, taxes, business write-offs - all of those numbers can be adjusted. But you can't fake sending out a check.

Source: Small Cap Investor

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