Dividends: a Lifetime Income for a Few Hours of Work
Thomas George-Colombel
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Thomas,

The terms set forth in the article to determine whether or not a company should pay a dividend to its investors are exactly right.

Whichever company that chooses to pay a dividend must have ample access to cash flow that can cover its operating expenses and the additional cost of a dividend.

A metric that monitors the cash a company will receive in the future is Deferred Revenue.

Deferred Revenue is any cash paid to a company, in advance of a customer receiving the product or service it paid for.

Any company with a large amount of Deferred Revenue is worth investigation because then it’ll be (almost) certain to have enough cash to payout for its dividend.