The dividend is not based on their cashflow. So if Apple is paying 1% dividend on a $100 stock price, but their cashflows increase every year, they're still paying you $1 every year.
What I'm suggesting is an exchange where the dividend is a fixed % of their cashflows. Let's say it's 1%. If their cashflow is 1 billion, then 1% of it goes to their shareholders. If it doubles the next year, then 1% of that 2 billion goes to the shareholders.
Combine this with a minimum holding period (ie 1 year), and you've basically now made the stock price equate to its fundamentals. ie how much cashflow it's generating in the future. If investors think it'll go up, they'll bid the price up. not because they want to sell it to a greater fool.
As I understand it, the dividend is set typically in a dollar amount and the % is a metric derived from that. I agree that the figure is (usually) a bit nonsense. However, I don't think your phrasing is as clear as it could be. If Apple announces a 10% dividend with a 1T market cap that's $100b in distribution. If the market cap doubles to 2T later that year, that dividend payment isn't suddenly updated to $200b; it just shows up as a 5% dividend in your typical metrics.
What I'm suggesting is an exchange where the dividend is a fixed % of their cashflows. Let's say it's 1%. If their cashflow is 1 billion, then 1% of it goes to their shareholders. If it doubles the next year, then 1% of that 2 billion goes to the shareholders.
Combine this with a minimum holding period (ie 1 year), and you've basically now made the stock price equate to its fundamentals. ie how much cashflow it's generating in the future. If investors think it'll go up, they'll bid the price up. not because they want to sell it to a greater fool.