In sophisticated settings it is considered bad manners to pull out a fancy watch merely to display it. Luxury goods makers have long been similarly finicky, always finding more noble uses for the bulk of their riches than returning cash to shareholders. Increased pay-outs from Bulgari and Swatch are the latest sign that attitudes are changing. This is welcome and not only because it reduces the scope for big acquisitions. Higher dividends in particular could also lend some credence to the claims by luxury goods makers that cash generation is improving.

After last year's tax controversy, Swatch needs to try harder than most. The Swiss watchmaker faces a renewed onslaught from Asian rivals on its Swatch and Flik Flak brands. So far, progress at its luxury watches has barely outweighed margin pressures on these mass market labels. With currencies likely to remain a drag, underpinning its bullish outlook with a bit of cash makes sense. The catch is that pay-outs remain modest. At Bulgari, a doubling of the dividend takes the yield from an insulting to a merely miserly level of 2.4 per cent, while its disappointing results illustrate that organic growth still comes at a steep price in luxuries. At Swatch, cash returns will total 3.7 per cent, but, again, the bulk is coming via fickle buybacks. Even worse, that already corresponds to most of the cash it is likely to generate this year. In absolute terms, at least, its valuation remains rather posh.