Dividends are a crucial aspect for both companies and investors. Dividends hold significant importance as they directly connect a company's performance with tangible benefits for investors.

For investors, dividends provide a regular income stream without the need to sell shares. This is especially important for retirees or those seeking steady cash flow. Dividends can also reduce portfolio volatility. In sluggish markets, investors still receive returns from dividends even if stock prices decline. Over the long term, much of the returns from stocks often come from reinvested dividends rather than just capital appreciation.

For companies, paying dividends makes their shares more attractive to certain investor groups, particularly conservative or institutional investors. A commitment to pay dividends signals that the company has stable profits and cash flows, and is confident in its future prospects.

Additionally, paying dividends forces management to be more disciplined in cash management and to allocate funds only to truly profitable investments. Consistency in paying or increasing dividends can enhance the company’s reputation and send a strong signal to the market that the company has robust long-term prospects.

A company can maintain consistent dividend payments for decades due to strategic, financial, and reputational reasons.

From a profit stability perspective, companies with stable or growing revenues and net income tend to be more capable of paying consistent dividends.

From a cash flow perspective, dividends are paid from cash flow, not just net income. If a company has strong operating cash flow and sufficient liquidity, dividend payments can be sustained.

For companies, dividends also play a role in maintaining investor trust. Consistency in paying dividends enhances the company’s reputation among investors, especially institutional and retirement investors seeking stable income. Dividend cuts or suspensions are often viewed negatively by the market.

Previously, CNBC Indonesia Research noted 20 stocks that consistently paid dividends for 20 years for the 2023 fiscal year. Now, we update the list of 20 stocks that have maintained consistent dividend payments for 20 years for the 2024 fiscal year.

List of Stocks Consistently Paying Dividends for 20 Years