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So they really will go to great lengths not to lower a dividend.
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We see this being achieved by a combination of a lower dividend (a cut by a third), new reinsurance covers (to reduce volatility of earnings going forward and capital consumption of the back-book) and portfolio adjustment/disposals, the largest of which could include Canada, in our view.
A trimmed-down organization should save $400 million a year eventually and a lower dividend has improved the firm's cash position.
Such disposals would involve a lower dividend but open the way to a higher valuation of the professional and international communications and data transmission activities.
He also predicted massive cost-cutting if a deal happens and said a Wyeth deal could provide some consolation for a lower dividend.
The company hopes that a lower dividend will allow it to compete more effectively in a telecommunications industry where fewer companies pay any dividends at all and use their financial resources to promote growth.
The board of directors can choose to raise or lower a company's dividends.
Earnings per share rose to $1.99, from $1.97, reflecting a lower dividend requirement on preferred stock.
"I will accept a lower dividend if they are able to repay the government faster," said Chris Armbruster, senior analyst at Al Frank Asset Management in Laguna Beach, California, which owns JPMorgan shares.
This reduced risk has prompted investors to pay higher prices for shares; in other words, to accept a lower dividend yield.
First, investors become more confident that equities will beat bonds so are willing to take less payment upfront (eg a lower dividend yield).
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