"Companies that have paid dividends over a long period of time have had to factor [that] into their capital allocation process," he said. Typically, it strengthens their volatility and risk management profiles.

Hartford pointed out that there are many companies in China with loads of cash on their balance sheets, but he believes shareholders are unlikely to ever see much of it. Cash, he noted, is a backward-looking number, so it's important to closely examine the rest of the balance sheet. Just remember what happened to all the U.S. and European banks paying big dividends.

On the issue of capital allocation, Lovelace compared Japanese automakers like Toyota and Honda, which compete globally, with many domestic companies. The latter group of businesses tend to be poor capital allocators and don't fare very well when they venture abroad.

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