Wealthy Living

Should Investors Expect a Netflix Dividend to be Paid?

The decision whether a company should pay a dividend depends on many factors.

Thousands of publicly-traded companies pay dividends to shareholders, and some have maintained long histories of raising their dividends every year.

Companies don’t decide to begin paying a dividend in a vacuum. There are many issues to be considered before returning capital to shareholders with a dividend.

Companies that are still in the early growth phase of their development often choose to reinvest excess capital back into their business instead of returning it to shareholders.

Netflix (NFLX) is a good example of this, as the company doesn’t currently pay a dividend and hasn’t since it went public in May of 2002. This doesn’t mean that investors should always avoid non-dividend paying stocks.

Business Overview

With more than 200 million members spread out over more than 190 countries, Netflix is a media giant.

While Netflix does offer a wide variety of second-run television programming and movies, the company also produces its own original content.

In addition, the company has spent heavily on creating its own content, which has been critical to Netflix’s success at growing its subscriber base by a high rate. The company also holds the leading share of total US TV time.

Reasons For Paying A Dividend

Many companies pay dividends as they are an important part of their capital allocation programs.

Some companies, such as Dividend Aristocrats like Coca-Cola (KO) and Johnson & Johnson (JNJ), have increased their dividends for several consecutive decades. In fact, both Coca-Cola and J&J are members of the exclusive Dividend Kings list.

Will Netflix Ever Pay A Dividend?

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