Another gauge of the financial strength of a cyclical is how consistently it pays dividends. United Technologies has increased its dividend every year since 1994, but between 1990 and 1993, there were no increases. This is common for a cyclical; many reduce their dividends or cut them altogether when times get tough. Although you can't always rely on United Technologies to raise its dividends, you can be pretty sure the company will pay something, even in bad times such as in 1991 and 1992.
Is the Firm Diversified Geographically and by Product Line? >>