Wednesday, 4 July 2012
From profits, come dividends. And from dividends, come investors' incomes.
Better still, the market tends to mis-price such companies, seeing them as dull dividend machines, when it should be valuing them as dull, safe dividend machines.
Warren Buffett, of course, is another investor with an eye for such businesses. If his well-known "economic moat" isn't another way of saying "businesses with high long-run sustainable profitability" then I don't know what is.