The most important metric for investors seeking good dividend-paying stocks isn’t yield or even the number of years a company has paid or increased its dividend.

It’s free cash flow, or cash from operations less capital expenditures. “The cash flow is a key item,” says Howard Silverblatt, senior index analyst at S&P Dow Jones Indices. Without it, he observes, a company can’t write that dividend check. And, Silverblatt notes wryly, “There’s no such thing as an operating dividend.”

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