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This article by @vitaliyk is spot on. Investors should view dividends (as well as buybacks) as a part of management's overall capital allocation strategy and consider how those decisions impact the company's economic moat. advisorperspectives.com/articles/2019/…
As we wrote here, dividends are a problem when they handcuff management into making poor capital allocation decisions at the expense of long-term shareholders. intrinsicinvesting.com/2018/04/26/whe…
Case in point is what happened at some blue chip CPGs. Post-GFC, investors craved dividends, so the boards obliged. Concurrently, barriers to entry fell and moats eroded. We've since seen some dividend cuts in the industry. intrinsicinvesting.com/2018/10/31/com…
