I'm an owner; I deserve to be paid

In my own business, I'm both an owner and an employee. I earn revenue by providing service; specifically I offer a variety of surgical services to persons in need of "fixing". I am also a small-business owner. I work to generate revenue. I pay the overhead in my business, then I pay my employees, and finally I pay myself. I must be careful to manage expenses, pay competitive wages but also keep a lid on wage inflation, in order to take home a paycheck. Being profitable is absolutely necessary, otherwise I'm working for the employees, the vendors, the owner of the building that houses my practice, but not to my own benefit.

It's no different with a big corporation, except that one depends on the senior management and the board of directors to look out for the interest of the owners, or the stockholders. It helps that senior management have interests aligned with the stockholders: i.e. they are vested in the companies stock, they have a long-term personal benefit to gain by rising earnings and stock valuation. It's also important that they pay attention to aligning compensation of the employees (including themselves) with profits to the shareholders, who own the business.

This is why I like companies that pay regular dividends, and rising dividends in particular. Some companies don't pay dividends, or pay very small dividends to their owners. They retain earnings to "re-invest" in the company's growth. Did you ever wonder why some companies can pay a generous dividend and still grow their revenues, earnings and valuations at the same time?
As an investor for retirement, I am not taking income out of my portfolio. In fact, I re-invest ALL earnings from my portfolio, in the interest of my future security. I make a free choice as an owner in a business to re-invest the dividends back into additional stock in that company, understanding that I have invested in the first place because I have some confidence in the ability of that company to earn profits, grow the business, and pay me a rising stream of increasing value in return for my capital investment in the business.

So I like companies who state, with the dividend payment, that they acknowledge my value to them as an investor and "pay me now". I return the favor by re-investing, so they get the same effect as if they had retained the earnings in favor of "growth", but in the dividend payment transaction, they are demonstrating their ability to be profitable, to grow over and above the dividend payment and they are stating their trust in me as an owner to continue to put resources into the company as opposed to sucking the juice out of it.

Many writers argue the merits of dividend-paying, versus dividend retaining companies. They argue the difference between "growth" and "value" kinds of investments. I simply want to see, in plain terms, that the company steadily generates revenue, has a rising stream of profits, and pays it's owners on a steady and preferably rising basis.

I choose to increase my position in those companies through dividend reinvestment and also purchasing new blocks of stock when the variations in the valuation of the stock are in my favor.
This isn't a quantitative approach to investment. It's an intuitive approach based on personal knowledge of the company, it's business and how it has historically treated it's stockholders.

If one follows the dividend payments as well as the payout ratio, one can spot a company that is not only steadily earning more from year to year, but also distributing a steady and rising portion of those earnings to the owners. That's a pretty simple indication that the business is being well managed. Not foolproof, perhaps, but a good place to start.