The misunderstandings surrounding dividends

RBC's James Jamieson argues too many investors still believe dividends imply a stock must be 'ex growth'.

Cycles are shortening, the free market is ever more skewed by unprecedented policy intervention and the rate of change across all areas of business continues to accelerate. In spite of European companies having to adapt to this increasingly complex set of circumstances, their practice of sharing profits with investors in the form of dividends appears firmly intact for two reasons. Firstly and most obviously, management avoid cutting their dividend due to the negative share price reaction. But secondly, less obviously and more lastingly, it is because Europe possesses an entrenched divide...