101–110 of 308 posts
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Companies that pay dividends What’s the point of a company that never pays a dividend.
Like Google? Or Facebook? Or Tesla?
So many facile understandings of pricing in these comments - there is a real mechanism that ties profits to pricing, it's not just "sell when it goes up"
Maybe I'm not understanding something but why do they consider paying dividends as something bad? They are essentially excluding the majority of businesses using this criteria.
Of course some banks have recently argued that their dividends are something like debts. They argue that cutting the dividend would cause investors to panic, so they must be essential to the financial system. This is a weird argument, but if you took it seriously you would have to include dividends in their post-2008 stress tests. You would require regulatory approval before they increased the dividend, as you would if they increased their debt-to-asset ratio.
https://www.bloomberg.com/opinion/articles/2020-04-06/a-virt...
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> Well first off, dividends are a normal method for business owners to make an income... they take all the risk, but reap some limited rewards by taking dividends rather than a salary. Shareholders should not just profit from the upside, but eat the downside too, which his exactly what this is. You can't take the dividends, claiming "I took all the risks", and then expect the state to bail you out. No upside without…
Yes, on the surface. You’re assuming that the business owner is some uber wealthy person that doesn’t mind missing the dividends because he’s happy on his yacht. While that is true for a lot of large companies (kind of like the ones that shouldn’t be asking for state aid), for the small ones it’s very different. As a small business owner myself, it matters hugely - if the company makes $100,000 in profit and I have t…
I keep saying over and over but the economic policy is something trump fucked up big time. He gave away the corporate tax breaks in times of prosperity when there was no need and the companies just made bank. He was dealt a great hand, a strong economy that would chug along no matter who the president was. Those are the times to focus on the poor and lift people up. Instead he wasted his opportunity on the tax cuts.…
Not that relevant as the shock is slump in demand. Printing more money etc makes it cheaper to buy things but people are still not buying so oil etc is in a free fall. Traditional interest rate based intervention doesn’t make sense you are just adding even more money available to a system that doesn’t want to spend it. Instead it needs to be targeted intervention that transitions the economy to the new reality and me…
We kept rates low and gave big tax cuts during boom times. This left little in our quiver for the end of the boom.
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No, I don’t think the two are the same. Like I said, dividends are usually the “salary” an employer takes at the end of the year. It could be $1, it could be $100,000, but it all depends upon how the business did. This is exactly how everyone is constantly complaining that a business should be operating - pay all the employees, then the owner/CEO/etc. takes part of what is left over.
Depends on scale. American Airlines in the US used 80 percent of their profits for several years for share buybacks ($12.5 billion from 2010-2019). Not R&D, not salary increases for workers. Does that deserve a bailout that preserves existing ownership? That’s the target. That sort of behavior should be nuked from orbit. I’d agree it’d be different if your business is small (less than $10M/year in turnover); you’d lo…
Why doesn’t the government just write a check to individuals and let them spend the money instead of bailing out companies in most countries?
It's a good common sense start. Companies that pay dividends or make share buy-backs are more vulnerable in a crisis (not only the current one), meaning they are riskier investments. Risk needs to be inversely correlated with reward for the markets to function. Investors in riskier companies deserve to get wiped out, not propped up. Companies registered in tax-havens should have no business applying for EU or US aid.…
Companies that pay dividends What’s the point of a company that never pays a dividend.
> Apple's long stretch of not paying any dividends reflected Jobs' opposition to them. During Jobs' second tenure at Apple from 1997 to 2012, the tech giant didn't pay a single dividend, even as its cash hoard ballooned to over $50 billion in 2011.
"The cash in the bank gives us tremendous security and flexibility," Jobs said in 2010.
But by 2012, and after Jobs had passed the reigns to Tim Cook, Apple finally reinitiated its dividend, making it the company's first dividend since 1995. The combination of Jobs' passing in 2011 and a cash hoard exceeding $100 billion in 2012 marked the beginning of a new era for Apple. Overnight, Apple became a formidable dividend stock -- and it looks like it's going to stay this way.
Source: https://www.fool.com/investing/2016/08/29/apple-dividend-his...
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Companies that pay dividends What’s the point of a company that never pays a dividend.
Most tech companies don't dividend... you buy the stock or sell it based on their current profits.
It's a good common sense start. Companies that pay dividends or make share buy-backs are more vulnerable in a crisis (not only the current one), meaning they are riskier investments. Risk needs to be inversely correlated with reward for the markets to function. Investors in riskier companies deserve to get wiped out, not propped up. Companies registered in tax-havens should have no business applying for EU or US aid.…
Corporations don't need to hoard money because viable businesses can always raise more. The exception is unforeseen systemic problems like this, but even they aren't really exceptions, the issue then is that everybody needs to borrow money at once and there aren't enough creditors which requires a policy change to make a sufficient amount of credit available.
Earlier quoted context omitted.
> Well first off, dividends are a normal method for business owners to make an income... they take all the risk, but reap some limited rewards by taking dividends rather than a salary. Shareholders should not just profit from the upside, but eat the downside too, which his exactly what this is. You can't take the dividends, claiming "I took all the risks", and then expect the state to bail you out. No upside without…
Yes, on the surface. You’re assuming that the business owner is some uber wealthy person that doesn’t mind missing the dividends because he’s happy on his yacht. While that is true for a lot of large companies (kind of like the ones that shouldn’t be asking for state aid), for the small ones it’s very different. As a small business owner myself, it matters hugely - if the company makes $100,000 in profit and I have t…
Honest question - how would paying yourself dividends change this math? Dividends have to come out of the same $100k right?