A person’s character is determined by how they behave when no one else is looking and during difficult times. In much the same way, we can learn a lot about a company’s management when they face adversity. One metric I look at closely during a downturn is cash generation relative to earnings. The ability of a company to grow its dividend throughout the economic cycle is highly dependent on the management’s ability to generate cash in a downturn.
Below are several select companies with a management confident enough to increase their cash dividends:
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