The 2012 Dividend Sinners: 20 Companies That Don't Pay Dividends But Should, Inc. (NASDAQ: AMZN) is the king of online retailing.  The market cap is also $97.5 billion and its low-margin model to buy future growth has the stock trading at a whopping 175-times expected earnings in 2012.  This valuation premium puts Amazon in a different camp than many of the other companies in this dividend sinners list.  With shares close to all-time highs and with shareholders loving Jeff Bezos, is there much reason to criticize the company right now?  This company has expanded and expanded without paying a penny to shareholders along the way. A token dividend might allow new income investment funds to own this stock and it would not likely signal that the growth is over here as Amazon moves its industry wrecking ball from sector to sector in brick-and-mortar retail and wholesale.

Bed Bath & Beyond, Inc. (NYSE: BBBY) has been a massive retail growth story.  The home products retailer has a forward price/earnings multiple of about 15.5 and its market cap is $16.5 billion.  Bed Bath & Beyond has been public since the early 1990s and it has announced a stock split on 4 different occasions.  The company grows and grows, it has nearly $2 billion in cash and liquidity, and it has no significant long-term debt. Thomson Reuters sees earnings at $4.62 EPS this year. This company could declare a special dividend and declare an ongoing dividend if it chose to do so.  Since it has no leverage at all, we would even think that the company could issue debt with rates so low and go ahead and pay out much of that small debt offering on top of a special dividend.

Berkshire Hathaway Inc. (NYSE: BRK-A) has been given a pass forever and the star CEO of Warren Buffett still is greatly revered on Wall Street and on Main Street.  But in a world of “What have you done for me lately?” it has to be brought up that the would-be replacement for Warren Buffett would eventually consider having to pay shareholders a dividend of some sort.  Berkshire Hathaway is as an investment, under some argument cases, a half-bond and half-equity strategy.  It has made many investors rich in the past, but it has stagnated with the broad markets over the last decade.  Buffett has admitted that the book value growth and share performance does not have the same opportunities ahead as what was seen up until the last decade.  He has also hinted that the firm could ultimately pay a dividend, but right now it has set the parameters for when it would buy back its stock.  Perhaps a dividend yield of 2% isn’t asking too much considering its massive cash and its $200 billion or so in market value.

Cincinnati Bell Inc. (NYSE: CBB) is a bit of a Hail-Mary telecom strategy now.  This company is one of the few telecom players left which does not pay a dividend.  It actually used to pay a dividend, but that has not been the case for more than a decade.  The market cap is only $675 million, it has low cash, and it carries over $2.5 billion in long-term debt on its books.  It also carries a negative equity and a negative ‘net tangible assets’ level according to Yahoo! Finance.  This stock has been dead money for so long that it has been mostly forgotten about and our take is that it remains a possible buyout target as part of the last bit of the telecom M&A consolidation wave.  When you have AT&T Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ) paying about 5% in dividends, why would investors want to park money in a low growth regional telecom that dates back to the 1800s and still cannot figure out a way to pay a dividend?

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Two different dollar stores are in our Dividend Sinners list again.  It turns out that both Dollar General Corporation (NYSE: DG) and Dollar Tree, Inc. (NASDAQ: DLTR) do not pay dividends yet.  These companies are effectively “The next Wal-Mart” when you think of the secular trends toward dollar stores in the years ahead.  Dollar General is still getting its shares sold by private equity owners.  Dollar Tree has a pending two-for-one stock split but there is still no cash payout.  These shares have grown and grown, they trade with a premium to most retail valuations now, Warren Buffett and team gave an endorsement of the sector earlier this year, and it may be difficult to get shares to keep performing higher and higher ahead.  A dividend would likely do the trick to maintain interest by new shareholders.

eBay Inc. (NASDAQ: EBAY) has come back close to a multi-year high, yet the online auction monopoly feels stuck. It trades at just over 17-times earnings and its future expansion comes from PayPal, ancillary services, and international markets. The market cap is now about $53 billion and it has almost $9 billion in cash and liquidity against long-term debt of $1.5 billion.  Are there new markets to go into that we are not yet privy to?  Probably, but starting a dividend payment might force to start paying a dividend rather than buying up so many online retail outfits that will encroach on eBay’s “Sell It Now” territory.

Electronic Arts Inc. (NASDAQ: EA) has been dead money and the freemium game market has moved in front of traditional console and PC gaming outfits.  The company has been trying to turn around but shares remain under $13 versus over $50 and $60 from before the recession.  With a new wave of consoles expected to hit shelves in the next couple of years, a dividend would offer some nice signals here about how it views its future. The stock trades at under 12-times earnings, it has a market cap of $4 billion,and it has cash and short-term liquidity of over $1.8 billion.  This video game outfit has gone through restructurings and layoffs, signaling that the only reason it is not a matured story is that it does not offer a dividend.

EMC Corporation (NYSE: EMC) is the king of storage, and it has control of VMware Inc. (NYSE: VMW).  The market value is above $51 billion, it trades at 14-times this year’s expected earnings, and it has what is growing closer to $11 billion in total liquidity with a negligible long-term debt level if you discount its deferred long-term liability charges. The company has said that it reviews its dividend policy but has chosen to grow with acquisitions. EMC is largely immune to outside pressure from holders, but this company could literally be an activist investor’s dream to be able to force EMC to unlock that shareholder value if it was not structured in a manner which shields it from shareholder pressure.  EMC could consider a one-time dividend as well as a regular dividend policy, unless it needs that much capital to go out and make another fairly large acquisition.

Express Scripts, Inc. (NASDAQ: ESRX) recently completed its Pac-Man merger with Medco Health Solutions and it has been public for nearly 20 years now.  It has never paid a dividend but it has split six different times.  This healthcare and cost containment via pharmacy benefit management provider trades at about 15-times expected earnings and its market cap is close to $43 billion.  The company probably has a couple of years more that it can avoid paying a dividend while it works in this giant Medco merger, but for it to not start a dividend policy might make some shareholders wonder if the earnings power and leverage here are manageable endlessly without paying a dividend.

Flextronics International Ltd. (NASDAQ: FLEX) is not alone in the offshore electronics manufacturing service providers but its $4.3 billion market value places it among the largest players in this field.  This company has been public for about two decades and it is basically the largest servicing the technology sector of its public peers. Valuations are low at about 6.5-times earnings. Of the larger non-dividend EMS players, a dividend policy might start to clear up some of the long-term volatility in this name and it might even eventually help the company exit a very long-term trading range of about $5.50 to $8.00 that has been in place for a couple of years.