Dividendpaying companies tend to have strong cash flow from "summary" of The Little Book of Big Dividends by Charles B. Carlson
Dividend-paying companies often exhibit a common trait – strong cash flow. This shouldn't come as a surprise, as companies that consistently pay dividends typically have stable and growing businesses that generate a reliable stream of cash. After all, in order to pay dividends to shareholders, a company must have sufficient cash on hand to do so. This is where strong cash flow comes into play. Cash flow is essentially the lifeblood of any business. It represents the amount of cash that flows in and out of a company over a specific period of time. A company with strong cash flow is better equipped to weather economic downturns, invest in growth opportunities, and reward shareholders with dividends. When a company consistently generates more cash than it spends, it not only signals financial health but also provides a cushion ...
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