10 Things Every Dividend Investor Should Know

9. Dividend-Paying Companies Tend to Have Higher Earnings Growth:

 The connection between dividend payments and earnings growth depends on various factors, such as financial health, company size, the industry, and its commitment to shareholders. As we have previously discussed, companies with strong cash flow generation tend to raise their dividends regularly and also reinvest the cash into other projects like research and development and expanding their operations. This may increase their earnings over time. This means that the correlation between dividend companies, earnings growth, and cash generation intertwines with each other. This can be seen from the performance of dividend-paying companies in 2023. Though dividend stocks lagged last year, corporate global dividends reached a record high of $1.66 trillion, up from $1.57 trillion paid in 2022.