Many investors will agree. It's true that, with time and experience - and lost illusions too - we learn to appreciate regular cash distributions from the companies we hold in our portfolios.

But this doesn't mean that investors don't have to ask themselves the question that is the subject of this article: does the listed company X or Y - which I already hold in my portfolio, or in which I'm considering investing - really have an interest in distributing a dividend to its shareholders?

The good news is that this question can be answered frankly and rationally.

As long as the company generates a high return on the investments it makes in developing its activities, it is in its interest to use its resources for this purpose, rather than returning capital to its shareholders. See ABC of financial analysis: value creation vs. value destruction.

Conversely, once a company's growth has reached a plateau and it is no longer able to generate high returns on the investments it makes in expanding its activities, it has every interest in returning as much excess capital as possible to its shareholders.

This simplistic approach is, of course, subject to nuances on a case-by-case basis. For example, some companies find themselves in a position to invest in expansion at a high rate of return AND to distribute a large proportion of their profits to shareholders. For them, it's the best of both worlds.

By the same token, a company may well be past its prime, or even in decline, and still not be in a position to distribute the profits it still generates. Indeed, a pivot in its activities or a strategic acquisition - both necessarily capital-intensive - might enable it to bounce back, in which case its precious resources that are about to dry up should not be taken out of the coffers.

The investor cannot therefore dispense with studying each situation individually and exercising his own judgement. If, however, he or she considers the distribution of a dividend to be legitimate and optimal, he or she must take a few precautions to ensure that this distribution is sustainable - and even more so, ideally, likely to grow - over the long term.

The first of these precautions is to ensure that free cash flow - even more than book profit - covers the dividend payout.

The second one, seemingly trivial but often highly instructive, is to check the company's long-term dividend payout record. Companies whose dividend payouts have been rising steadily for several decades - the famous "dividend aristocrats" - are bound to have a more encouraging profile than those with erratic payouts.

Beyond the figures, it will be impossible to form a pertinent idea of the legitimacy of the dividend without understanding the underlying - i.e. the company's business and its prospects. It doesn't matter how juicy a dividend yield is, and how well covered it looks on paper: if business is set to contract, the distribution of profits will inevitably be impacted.

Analyzing figures and ratios is therefore only the first step.