Know Your Identity

An identity is an important part of a self-image. It often leads us to behave in a way to live up to that identity. If your identity is “the life of the party,” when you get to the party, you probably make it your business to kick it up a notch.

If your identity is to be the guy everyone can depend on in times of crisis, you step up when you see someone needs help.

I’ve had several identities in my life. The thoughtful and considerate guy. The hardworking, don’t-have-to-worry-about-him, he’ll-get-it-done guy. Now I’m just the best-selling-author guy.

Companies also have identities.

Thomas Freyman, CFO of Abbott Laboratories (NYSE: ABT), told Barron’s in February 2012, “Dividends are an important part of Abbott’s investment identity and a valued component of our balanced use of strong cash flow.”5

Abbott has paid a dividend every year since 1924 and has raised the dividend for 40 consecutive years. That’s a key component of its identity. Not only does any investor who is considering becoming an Abbott shareholder take the dividend into consideration, but it’s likely an important factor in the decision of whether to invest in the company.