Netflix Dividend: Will the Company Ever Pay Investors?

CAREER STEP UP

The decision whether a company should pay a dividend depends on many factors.

Thousands of publicly-traded companies pay dividends to shareholders, and some have maintained long histories of raising their dividends every year.

Business Overview

With more than 200 million members spread out over more than 190 countries, Netflix is a media giant.

While Netflix does offer a wide variety of second-run television programming and movies, the company also produces its own original content.

Subscribers have access to Netflix’s library of TV series, documentaries, and feature films across nearly every genre imaginable.

Reasons For Paying A Dividend

Some companies, such as Dividend Aristocrats like Coca-Cola (KO) and Johnson & Johnson (JNJ), have increased their dividends for several consecutive decades. In fact, both Coca-Cola and J&J are members of the exclusive Dividend Kings list.

Companies like Apple (AAPL) and Cisco Systems (CSCO) have initiated dividends in the last decade because their shareholder bases demanded a dividend, and their business models generated consistent free cash flow.

As stock prices fall in a market downturn, dividends provide a cushion against paper losses.

They also allow investors who reinvest dividends to purchase more shares at lower prices and thus increase their overall dividend income.

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