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Technology Stocks : Compaq

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To: Night Writer who wrote (72006)11/16/1999 6:56:00 PM
From: rupert1  Read Replies (1) of 97611
 
NW: I remember last year a discussion of the COMPAQ dividend. One of the bigwigs at the company explained that the policy was to qualify COMPAQ for those big pension and other institutional funds which need to invest in stocks which have paid a dividend for x number of years without break. So at the beginning of this process, the small size of the dividend is not that important: it is important that it can be sustained and can be gradually increased. The worst mistake a company can make is to embark on this path but to cut the dividend or suspend it in any given year. Paying a dividend consistently and increasing it gradually is one of the criteria by which the good management, stability and longevity of a company is judged, through good times and bad.

The statement by Rosen challenges all those in the market who have been saying lately that COMPAQ is imploding, facing Chapter 11 and so on. It will catch the attention of the big institutions.
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