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Falling profits at US and UK companies need not spell trouble for portfolios
If a company’s share price is the sum of its future dividends (as per the dividend discount model) and those dividends can only be paid from earnings (as per company law), then equity investors are in for some bad news (as per the latest corporate earnings reports). A second consecutive quarter of falling profits at the US’s biggest public companies is about to trigger a technical earnings recession, presage lower dividends and depress share prices. If, however, share price movements are not so mathematical (as per recent market examples) and dividends not so essential (as per growth company performance), then there may be some better news (as per most wealth managers’ current analyses).
https://finance.yahoo.com/m/d9e71dc...5/falling-profits-at-us-and-uk.html?.tsrc=rss
If a company’s share price is the sum of its future dividends (as per the dividend discount model) and those dividends can only be paid from earnings (as per company law), then equity investors are in for some bad news (as per the latest corporate earnings reports). A second consecutive quarter of falling profits at the US’s biggest public companies is about to trigger a technical earnings recession, presage lower dividends and depress share prices. If, however, share price movements are not so mathematical (as per recent market examples) and dividends not so essential (as per growth company performance), then there may be some better news (as per most wealth managers’ current analyses).
https://finance.yahoo.com/m/d9e71dc...5/falling-profits-at-us-and-uk.html?.tsrc=rss
