24/7 Wall St. loves companies which send capital back to shareholders via dividends. With all of the uncertainty in today’s markets and in the fluctuating economy, having a solid dividend policy may be the key to keeping nervous investors from fleeing and going into cash or Treasury bonds which pay almost nothing these days. Too many great companies just refuse to give up their ‘growth stock’ status and pay dividends to shareholders. For some companies, they can get away without paying out a single cent to owners because the value of growth is so strong. For other companies, they fall into the “Dividend Sinners”category of companies which should be paying a dividend to holders and which have just decided to control that cash in-house instead.
Our review focuses on Amazon.com, Inc. (NASDAQ: AMZN), Bed Bath & Beyond, Inc. (NASDAQ: BBBY), Berkshire Hathaway Inc. (NYSE: BRK-A), Cincinnati Bell Inc. (NYSE: CBB), Dollar General Corporation (NYSE: DG), Dollar Tree, Inc. (NASDAQ: DLTR), eBay Inc. (NASDAQ: EBAY), Electronic Arts Inc. (NASDAQ: EA), EMC Corporation (NYSE: EMC), Express Scripts, Inc. (NASDAQ: ESRX), Flextronics International Ltd. (NASDAQ: FLEX), Google Inc. (NASDAQ: GOOG), Jack In The Box Inc. (NASDAQ: JACK), Symantec Corporation (NASDAQ: SYMC), Teradyne Inc. (NYSE: TER), United Continental Holdings, Inc. (NYSE: UAL), Urban Outfitters, Inc. (NASDAQ: URBN), Western Digital Corporation (NYSE: WDC), Yahoo! Inc. (NASDAQ: YHOO), and Zebra Technologies Corporation (NASDAQ: ZBRA).
You will see that not all of these are old technology giants meant solely as a chase of the fresh Dell Inc. (NASDAQ: DELL) dividend announcement. Our aim is to identify companies which can make payouts but which have been holding the cash for a rainy day for far too long. Some of the more obvious Dividend Sinners are the same as you have seen criticized before, but many of these are overlooked by the media and by investors alike.
Cisco Systems, Inc. (NASDAQ: CSCO) waited far too long to adopt a dividend policy and look what happened to its shares after inaction. Kohl’s Corporation (NYSE: KSS) was the last of the big department stores to have a payout. We have finally seen in the last year that Amgen Inc. (NASDAQ: AMGN), Apple Inc. (NASDAQ: AAPL), and NASDAQ OMX Group Inc. (NASDAQ: NDAQ) capitulated and finally decided to declare a dividend policy over the last year or so; and Dell Inc. (NASDAQ: DELL) finally jumped on board with a good dividend policy.
Of the 2011 Dividend Sinners there were only one-fifth (4 of 20) of the companies covered a year ago which have since decided to institute a dividend policy. We would like to propose that one-fourth or more begin a dividend policy as 2012 merges closer to 2013.
Here is our list of The 20 Dividend Sinners in 2012 and why…