Should Disney Restart Its Dividend When It Reports Q2 Earnings?

At the pandemic's onset, Disney (NYSE: DIS) moved quickly, plugging holes where cash was escaping. The contagion was new, and little was known about its severity or how long it would last. As a result, management felt the No. 1 priority was to preserve liquidity and ensure survival. 

Dividends are optional payments to shareholders. Therefore, shutting off the dividend comes with no immediate cost to Disney. By contrast, borrowing money to maintain the dividend would have meant interest expenses. Consequently, pausing the dividend was the most logical place for management to start conserving cash. 

Turning the page to the next chapter, nearly all Disney's theme parks and resorts are again open (though operating at reduced capacity), its films are returning to the big screen, its TV networks again have content, its streaming services are thriving, and its survival through the pandemic is almost certain. So investors are asking: Is it time for Disney to restart its dividend? 

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Source Fool.com