Cash

Although there are good theoretical reasons for a company to keep the earnings for further expansion and pay no dividend, I must say I agree with JW; a growth stock that gives no regular cash to its shareholders is never my cup of tea.

No, that's not because I love the sense of "feeling good" when receiving a tiny sum of money. (For retired persons, however, that consideration may have real importance.) In fact, I have the occasional silly habit of putting the dividend back on the same stock.

My consideration is actually simple: paying a dividend regularly is a good test on the cash flow and healthy running of a company. For visitors with some experience in the stock market, it is easy to appreciate that the reported profit of a company means very little: A company could earn $1 billion by running its business well, but it is equally, if not more, possible, that that $1 billion of profit comes from re-evaluation of the market price of its factory or any other asset. In fact, some companies of a certain strong nation have the habit of reporting that amount of profit without actually receiving it - and the date of payment due may be put down as thirty-first of February.

Of course, there are always hints if you go through the financial report of those problematic companies. But, if you are a busy small investor, a regular and sustained payout is an excellent surrogate test on how robust a business is and, unfortunately, how reliable the financial report is.