Tags: Krantz | dividend | yield | pay

USA Today: The Stingiest, Richest Big US Companies Should Open Their Wallets

By    |   Wednesday, 11 March 2015 08:00 AM

Some of the wealthiest big American companies could easily afford to pay a higher dividend to their shareholders but either don't pay one at all or don't increase their payout.

USA Today analyzed date from S&P Capital IQ to identify what could be the stingiest ones.

At the top of the list is Warren Buffett's Berkshire Hathaway, an industrial conglomerate that pays no dividend at all to its stockholders.

Some of the other more prominent dividend tightwads include Apple, Google, Yahoo and Citigroup.

"Investors would much rather get their hands on this cash than allow companies to squander capital chasing acquisitions that might have disappointing returns or let cash sit on their balance sheets collecting rock-bottom interest rates," wrote USA Today financial columnist Matt Krantz.

To come up with companies that are paying dividends "well below their means," he found candidates that have paid out to shareholders less than 30 percent of their net income in the past 12 months.

"That's an extraordinarily low payout ratio," Krantz argued. In fact, S&P 500 companies have an average payout ratio of 50 percent, according to S&P Capital IQ.

If some of the companies on his list begin to pay dividends at all, or raise them, presumably it would provide some lift to their share prices.

For instance, if Google were to commence returning cash to investors, Krantz quoted UBS analyst Eric Sheridan as saying the step could be "the biggest driver of upside for shares but no announcement is imminent."

Krantz added, "And of course there's Apple, which pays a below the market dividend yield of 1.5 percent, despite being the most profitable company known to man and sitting on cash and investments of $178 billion."

His list of the most profitable S&P 500 companies that pay no dividend at all consist of Berkshire, Google, Gilead Sciences, Yahoo.

Those that pay less than 1 percent despite having high net income consist of Citigroup (0.1 percent dividend yield), Twenty-First Century Fox (0.9 percent) and American International Group (0.9 percent).

Other highly profitable but parsimonious dividend payers on included Goldman Sachs (1.3 percent), Walt Disney (1.1 percent), Oracle (1.1 percent), Apple (1.5 percent) and Comcast (1.7 percent).

At the other end of the scale, The Motley Fool turned to its experts to find some of the best U.S. companies that are considered likely to enrich their shareholders with higher dividends in coming quarters.

Those more generous dividend payers included American Tower (currently at 4.9 percent), PepsiCo (2.6 percent) and Verizon (4.3 percent).
 

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Some of the wealthiest big American companies could easily afford to pay a higher dividend to their shareholders but either don't pay one at all or don't increase their payout.
Krantz, dividend, yield, pay
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2015-00-11
Wednesday, 11 March 2015 08:00 AM
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