Disney Is Proving Why It Doesn't Need to Pay a Dividend
Companies that generate stable cash flows, have strong balance sheets, are industry leaders, and have been around for decades tend to be the kinds of businesses that investors can count on to outlast an economic downturn. There's no doubt that Walt Disney (NYSE: DIS) is the leader in the entertainment industry. After all, it is one of just two communications stocks (along with Verizon Communications (NYSE: VZ) in the Dow Jones Industrial Average (DJIA).
But unlike Verizon -- which has the highest dividend yield of any DJIA component at 5% -- Disney is just one of three DJIA components that does not pay any dividend. (In case you were wondering, the other two are Boeing and Salesforce.) Here's why Disney doesn't need to pay a dividend but could reinstate it in a few years.
Image source: Getty Images.
Source Fool.com
