It’s always a great feeling to receive a dividend from one of your investments.
And it feels even better if that dividend was an increase from the previous year.
However, if the converse happens, most investors are left with a bitter taste in their mouths.
A reduction in dividends may portend worse times to come, or it could be just a one-off blip for the business.
StarHub (SGX: CC3) is a prime example of a company that has reduced its dividend in recent years.
The telecommunication company (telco) used to pay an annual dividend of S$0.20 back in 2016.
Just four years later, in 2020, its dividend has shrivelled to just S$0.05, down a whopping 75%.
The telco used to be a dependable source of quarterly dividends for income-seeking investors, so the cuts came as somewhat of a surprise.
What led to these dividend reductions? Could your stock be the next in line to announce a dividend cut?...