Asset Classes

Free investment financial education

Language

Multilingual content from IBKR

Close Navigation
Learn more about IBKR accounts

Reduced Dividends

Trading Term

Investors usually buy shares in dividend-paying companies for the regular dividend payments. A cut or halt in dividend payments affects the cash inflows of these investors. Investors assume that a company is reducing dividends because it is having cash flow problems. This could be the result of deteriorating business conditions, such as declining sales, rising expenses and falling profits. This flag identifies companies where cash dividends (as a fraction of market capitalization) for the most recent fiscal year are significantly lower than the same metric from the prior fiscal year, both in an absolute sense and also relative to the rest of the universe.

IBKR Campus Newsletters

This website uses cookies to collect usage information in order to offer a better browsing experience. By browsing this site or by clicking on the "ACCEPT COOKIES" button you accept our Cookie Policy.