4 ms·

No, they are not. The vast majority of companies do not pay dividends.

• rsync 6y ago
  You are correct that the vast majority of publicly traded companies do not pay dividends. However, that is a small minority of all firms and I hope you will find it interesting to learn that many, many small firms' owners (Doctors offices, car dealers, liquor stores, carwashes, etc.) take regular compensation in the form of dividends. Further, I will point that in the United States, if you are an "S Corp" (and millions are) you cannot, for the most part, carry over liquid cash from one year to the next. You are forced to distribute any leftover cash, typically in the form of distributions to owners (dividends). That being said, receiving state aid on condition of suspending dividend payments makes very good sense and is the first condition I would add to such aid - you shouldn't need state aid if you are distributing profits.
  • mikorym 6y ago
    Why do a majority of publicly traded companies not pay dividends? I've noticed before that for many companies by identifier (ISIN, SEDOL, CUSIP, take your pick) that there are no dividend histories. The only example that I know the reason why is Amazon. [If you buy Amazon stock you either 1) expect dividends at some later stage or 2) plan on selling the stock for a higher price.]
    • wingspar 6y ago
      Some companies 'reinvest' profits in their operations and don't pay dividends. Others avoid dividends, as dividends are profits that are taxed twice. (Once for corporate income taxes, and again for individual income taxes.) Selling the stock for a higher price has opportunity for favorable tax treatment at the lower long-term capital gains vs dividends taxes as regular income.
      • vonmoltke 6y ago
        > Selling the stock for a higher price has opportunity for favorable tax treatment at the lower long-term capital gains vs dividends taxes as regular income. Dividends are generally taxed at the long-term capital gains rate, not as ordinary income.
      • mikorym 6y ago
        This makes sense to me for private or public companies where the owners are also employees or otherwise benefit. It doesn't necessarily make sense for me if you are a very small stakeholder.
  • NovemberWhiskey 6y ago
    > You are correct that the vast majority of publicly traded companies do not pay dividends. How many stocks in the S&P 500 pay no dividends?
    • _se 6y ago
      418 pay dividends.
      • NovemberWhiskey 6y ago
        Right, and I believe roughly half of the Russell 3000 constituents pay dividends as well. Given that the Russell 3000 represents about 98% of all U.S. equity market capitalization, is there a sense in which the statement: > You are correct that the vast majority of publicly traded companies do not pay dividends. ... is usefully true?
        • _se 6y ago
          My original point was that the vast majority of _companies_ don't pay dividends, not that most _public_ companies don't. I'm not sure where that came from. Someone else made the comment that plenty of private companies pay "dividends" (e.g. USA K-1), but a cursory read of the Danish policy indicates that these private dividends are probably not affected.
  • _se 6y ago
    I haven't read the law, but I would be surprised if it excluded the Danish equivalent of K-1. That would not make sense, it's a completely different thing.