Thanks for asking this question
A business is run to meet some unmet needs. Accordingly, the business operations will generate returns and a portion of them will be profits.
The profits from the business are utilized for
- Business/Capacity Expansion
- R&D (If Applicable)
- Providing Dividends
This underlines the fact that dividends are one of the outcomes of a profitable business.
Owing to this, it is best to find businesses that are able to operate profitably and this can be in the product/service or any hybrid domain.
I have written about this previously,
- How to Generate High Dividend Returns from Investments?
- Which are some good retirement stocks in India in 2022?
- Are stocks with a low PE ratio generally safe to buy?
Hope this helps