Can Disney Afford To Pay a Dividend?
The Walt Disney Company (NYSE: DIS) suspended its semiannual dividend in the first half of 2020 as the COVID-19 pandemic wreaked havoc on its business. That move made sense -- the movie theater business was decimated in those early months, and the company's parks were closed or subject to capacity constraints. By suspending the dividend, Disney preserved about $1.6 billion in cash every six months.
While Disney's various businesses have largely bounced back, the company has yet to reinstate the dividend. Part of the problem is spending. Disney has been pouring cash into its streaming services, racking up massive subscriber figures and equally massive losses. In the first quarter of fiscal 2023, which ended on Dec. 31, the direct-to-consumer segment posted an operating loss of over $1 billion.
With Bob Iger back as CEO, the company's priorities are shifting. Disney anticipates restarting dividend payments by the end of this year, fueled by a newfound focus on cost-cutting and efficiency.
Source Fool.com
