Dividend changes fail to predict future profitability in UK firms.
The study looked at UK companies from 1990-2015 to see if changes in dividends can predict future profits. Dividends are important because they give clues about a company's future earnings. Even though dividends are taxed heavily in the UK, they still matter to stockholders. The researchers found that in the UK, dividend increases or decreases don't actually tell us much about how profitable a company will be in the future.