With tough times come tough measures, which helps to explain why a number of companies have initiated job cuts. However, organizations that already pay their shareholders dividends are reluctant to cut them, as such a move would yield substantial criticism. In other words, even when the going is tough, dividends may stick around.
It’s not just about management being unwilling to sacrifice passive-income opportunities. Rather, companies that provide dividends tend to perform better during recessions than purely growth-oriented businesses.
Finally, the lion’s share of stable firms providing passive income streams to their stakeholders are tied to businesses with a strong and established track record. Instead of relying on aspirational narratives, these dividends come from actual net profits.
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