BHP’s forced dividend

That Australians have a strong attachment to dividends is well documented. In the current market, that attachment is bordering on dangerous obsession. The wisest being in the universe, Yoda, has this to say about attachment: ‘the shadow of greed, that is’. Australian investors could heed a lesson from the Jedi Master. A love of dividends is not only distorting valuations today –dividend paying stocks are mostly dear – it also distorts capital allocation decisions of management keen to please their shareholders. It’s not only small companies making mistakes. The biggest business of them all, BHP Billiton, is doing dividends badly....

That Australians have a strong attachment to dividends is well documented. In the current market, that attachment is bordering on dangerous obsession.

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