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.
The company began with humble beginnings, by mailing out DVDs to subscribers. In recent years, its focus has shifted to streaming services over the Internet.
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.