Nam Tai Elec. (NTAI) Message Board

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Technology Stocks : Nam Tai Elec. (NTAI)

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To: BUFFY Z who wrote (1295)	3/24/1998 9:48:00 AM
From: Paul Senior	Read Replies (1) of 1696

Buffy Z. I see the dividend policy much more than that. Consistency with dividend policy is very, very important IMO. There are plenty of companies that never pay a dividend, or companies with the same dividend every year, or companies which raise dividends every year, or companies which have dividends and raise them occasionally. And there are some special companies where the "dividend" fluctuates with "earnings" (REITs).This is all okay. But there are no companies that switch policy -none that I know of- on a year-by-year basis. One reason is because dividend cuts are construed as a signal by management of bad times ahead (or continuing), or a strategic change in direction. The consequence would or could be very dire for the price of the stock. In case of NTAIF, as I interpret the news announcement, this dividend thing is not a special item - it is an approved policy (quarterly dividends) approved by the board of directors. I would expect that the dividend amount, if not increased, to be maintained. If this is not so, i.e. the policy changes (again), I will certainly reevaluate my decision to hold the stock (and I bought it originally with no expectation of a dividend). Paul Senior

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