Dividend Rate Cuts – Stale Dividends

cutting money 100x100 Dividend Rate Cuts Stale DividendsDividend rate cuts are painful and can send your portfolio into a tailspin. Why do they happen and can we see them coming? In our continuing series on dividend rate cuts we are going to look at stale dividends with these questions in mind.

Stale dividend rates/ earnings

Dividend rates are set by companies with an expectation around the future growth of the company. As the company’s profits increase so too should the dividend rate. When you find a company where the dividend has remained fix for an extended period what you have is a stale dividend.
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