👉 Background: Cochlear is the Australian-founded medical device company that manufactures and sells cochlear implants, the device that's surgically inserted to help with hearing. It owns more than 60% of the global market sharein cochlear and acoustic implants.

👉 What happened: During the COVID years, Cochlear took a bit of a hit because there were significantly fewer elective surgeries. But now, at Cochlear's annual meeting with shareholders, they said they expect underlying profit to grow in the double digits.

👉 What else: The Cochlear board's dividend policy has committed to paying out 70 per cent of their underlying profit. So the bigger the profit, the better the news for investors' hip pocket too.

What's the key learning?

💡A dividend policy explains how a company will distribute its dividends to its shareholders.

💡There are three different types of dividend polices:

• Policy #1 - Stable Dividend Policy: This is the most common, and is where companies give the same dividend amount each year.
• Policy #2 - Constant Dividend Policy: This is where the company pays a percentage of its earnings as dividend each year.
• Policy #3 - Residual Dividend Policy: This is where the company pays out dividends after sorting out all other company costs, and give investors the remainder.

💡For Cochlear, they've gone with the ride or die policy (ie #2). And this year, it seems to be a winner for investors.

‍