Link Straits Times
What that means?
Cut dividend payout lor.
This spell troubles for many retirees relying on these bank stocks for their expenses.
Crisis period require measures to remain sustainable, reducing dividend payout to conserve capital is a typical move to adopt to ensure the company remain competitive.
While some might curse and swear about this, but we should look at it from the rational angle.
Classic example : Asian Pay TV
This company consistently payout high yield dividend yearly, even when the cash flow begun to dry up, they still commit to paying out as high as 9% yield which is obviously not sustainable in a long run. Not only this resulted in lower savings but also lesser cash flow which restricted the company for further growth the result was, the share price of the company crashed down and the company has no choice but to dramatically cut dividend.
As the old saying' In the time of crisis, cash is King'.
A company with huge cash reserves has better chance to remain sustainable during crisis and perhaps even cater for further growth. Reducing dividend definitely is a painful decisions, but this is a necessary action in the period of tough time.
Yes, I understand its painful to our pockets, but remember there are people who are far more worse in some part of Earth. Ration our resources, cut down whatever unnecessary expenses or even find a part-time job to compensate.
I am sure we can survive through. What?! Do not tell me anything about your children music lessons or missing a Starbuck coffee. You pay for what you get and so naturally you will have to bear the consequences of financial difficulties.
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