📖Benjamin Graham

Dividend Record

🌿 Intermediate★★★★★

Demand an unbroken record of annual dividend payments spanning at least twenty years before investing.

💬

Some payment of dividend must have been made in every year for at least the past 20 years.

— _The Intelligent Investor_，1949

🏠 Everyday Analogy

Just like choosing a restaurant, one that offers complimentary side dishes to regular customers every year for 20 consecutive years demonstrates stable operations and sufficient cash flow, with no risk of suddenly shutting down or disappearing. In contrast, restaurants that offer sporadic discounts often indicate poor management and may close at any time.

📖 Core Interpretation

Companies that have paid dividends annually over the past 20 years are more trustworthy.
💎 Key Insight：A twenty-year dividend record is a powerful filter for quality. It encompasses multiple economic cycles, proving the company can maintain payouts through booms, recessions, and crises. Companies that have never cut dividends over such a span demonstrate the financial consistency and shareholder commitment Graham values most.

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❓ Why It Matters

Consistent dividend payments indicate that a company possesses stable profitability and sound capital allocation.

🎯 How to Practice

Review the company's dividend history and prioritize those with a long-term track record of stable dividend payments.

🎙️ Master's Voice

The essence of investment management is the management of risks, not the management of returns.
Graham prioritized risk management. Returns followed from avoiding losses. Protecting capital came before seeking gains.

⚔️ Practical Guide

✅ Decision Checklist

  • Am I managing risk?
  • Is capital protected?
  • Am I focused on not losing?

📋 Action Steps

  1. Prioritize risk management
  2. Protect capital first
  3. Let returns follow

🚨 Warning Signs

  • Ignoring risk
  • Return-focused only
  • Unprotected capital

⚠️ Common Pitfalls

✕Not paying dividends isn't necessarily a bad thing.
✕Some high-growth companies opt for reinvestment.

📚 Case Studies

1
Post-Crash Utility Dividend Stability (1932)
Analyzed a regulated electric utility that maintained regular dividends through the 1929–32 crash despite steep price declines.
✨ Outcome：Classified as investment-grade; buying at depressed prices with stable dividends produced strong long‑term total returns.
2
Blue-Chip Industrial Payout Consistency (1954)
Reviewed a major industrial company with an uninterrupted 25-year dividend record despite WWII and recessionary periods.
✨ Outcome：Deemed suitable for conservative investors; steady payouts and earnings recovery supported gradual capital appreciation with limited downside risk.

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