Increasing cash flow

Corporations with increasing cash flow are not a direct predictor of an economic turnaround. In fact, it’s possible that they have nothing to invest their cash in, which would show a lack of confidence in the future economy. Much like Microsoft, if they can’t find a place to wisely invest the extra cash, a dividend is an appropriate response. But that is also an admission that they don’t have any more good ideas worth investing in. That is a very difficult thing for a tech company to say.

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