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Technology Stocks : Semi Equipment Analysis

SOXX 309.36

+2.2%

Dec 3 4:00 PM EST

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To: Donald Wennerstrom who wrote (53691)	9/13/2011 2:27:23 PM
From: Jacob Snyder	1 Recommendation Read Replies (1) of 95520

<high dividend paying technology firms, and firms that repurchase shares, have generally fared better than those that have used cash for other purposes, such as M&A.> A dividend is good, not just because investors are getting paid to hold the stock. The main reason a dividend is good, is because it is proof of good management. We've seen how companies can fake sales, by doing things like loaning money to insolvent customers, to goose demand. We've seen a list of ways companies can fake earnings. But nobody can fake a dividend. It either gets paid, or not. There is no such thing as a "pro-forma non-GAAP one-time-events-excluded-we-promise-until-the-next-time dividend". Paying a significant dividend (30-50% of earnings), imposes unavoidable discipline. It means balance sheets have to be good enough, to continue paying the dividend during downturns. It means less wishful thinking, where management over-pays to acquire growth that doesn't happen.

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