Developing a safe dividend led portfolio

The world seems to totter forward a few steps and then back, its a slow dance and a slow recovery. But it is a recovery, it seems all are agreed. But looking at the market one sees a rise in a trend, that is companies giving money back to investors in one form or another. One is "special dividends", a company I watch Kapstone Paper, a well run company, just decided to give its investors $2 each back, above normal dividends. Many other companies are following suit, Apple finally gave a dividend, so did Dell, so did Microsoft. The other is share buy backs which are increasing across the USA. Buying back shares rewards the investor by reducing the outstanding share count so each share remaining is worth more. Why are companies doing this?

The sad fact is that companies give back money to investors when a) they are no longer in "growth" and b) when they cannot find anything to do with their cash that would make more money. That is worrying as most companies should want to spend to expand and grow. The trend now is to sit tight and give cash back, not a good sign. It means that many US companies do not see revenue growth as more than a few percent a year, i.e.e slow growth. In this new world I think that my thesis of large global companies (I.e. not going bankrupt) who pay good dividends, but whose shares are relatively flat, is a good plan for the home investor. Using this investment method one gets increased value from the dividend and some increase from the shares, but more importantly a degree of safety from turmoil. I think we are well into a "value" investment cycle.