Japan Firms’ Habit of Hoarding Cash Becomes Boon for Dividends
- Japan firms seen less likely to cut payouts than Europe, U.S.
- Long seen as a problem, companies’ cash hoards are now a boon
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Japanese companies have long been criticized for hoarding too much cash. Now the habit is being touted as a reason to buy Japan stocks, as the coronavirus pandemic dims the outlook for dividend returns elsewhere.
Japan has “improving dividend appeal,” with its companies less prone to payout cuts than those in other countries given their net cash positions and improving governance, Jefferies analysts wrote in a report.