Dividend Failures: 6 Biggest Stocks Refusing to Reward Shareholders

Berkshire, Google and Amazon yield zilch

By Jeff Reeves, Executive Editor of InvestorPlace.com


Apple Inc. (NASDAQ:AAPL) made waves on Monday with the announcement of its first-ever dividend. The Apple dividend will total $2.65 per quarter and is coupled with a $10 billion buyback plan for AAPL stock.

The action removed Apple from the list of massive corporations that refused to pay a dividend to shareholders despite mega-cap valuations. But some other corporations out there remain dividend misers despite the Apple move.

Who are the largest companies that still refuse to pay dividends? Take a look at these top offenders:

Google (NASDAQ:GOOG): Despite more than $5.2 billion in cash and $34.6 billion in short-term investments on its books, Google still is not among the ranks of dividend-paying stocks. Granted, it just ponied up a huge $12.5 billion payday to buy out Motorola, and it couldn’t use its cash in such ways if it was paying dividends. But the size and balance sheet of this tech giant indicates that at least a nominal dividend yielding 1% would be easily within Google’s power. Google’s market cap as of this writing is well over $205 billion.

Berkshire Hathaway (NYSE:BRK.A, BRK.B): Warren Buffett has picked some great investments for Berkshire over the years, and he undoubtedly thinks the company will invest its cash more wisely than any individual shareholders could on their own. However, that doesn’t change the fact that many folks want income — not reinvestment — and perhaps it’s time to consider a Berkshire dividend. But like Apple and its post-Steve Jobs leadership, we might have to wait until Warren Buffett is no longer with the company before such a dividend comes to pass. Berkshire Hathaway’s market cap as of this writing is well over $200 billion, and it has more than $37 billion in cash on the books.

Amazon (NASDAQ:AMZN): Amazon is bleeding cash big-time on its Kindle efforts, and like Google it couldn’t be making expensive moves like this if it had a big dividend bill to pay each quarter. However, it remains to be seen if Amazon is just throwing away money on a cut-rate tablet that never will compete with the iPad — and in the long run, shareholders might be more content with a dividend and a pure e-commerce stock than an innovator spending its cash like a startup. Amazon’s market cap as of this writing is well over $80 billion. Amazon has more than $5.2 billion in cash on its books and another $4.3 billion in short-term investments.

Close behind these non-payers are dividend misers that barely pay anything.

Embattled banking stocks Citigroup (NYSE:C) and Bank of America (NYSE:BAC) both pay a mere 1 cent per quarter, and have market caps of over $100 billion right now. Granted, Citigroup petitioned the Federal Reserve to increase its dividend above the penny payout … but problems with its balance sheet after failing the “stress test” from regulators made such an increase an impossibility. Bank of America didn’t even ask the Fed for such a bump to its payout, presumably because it expected a similar answer.

The troubled financial stocks at least have an excuse of some form. But let’s not forget Oracle (NASDAQ:ORCL), which pays a meager 6 cents for an 0.8% yield. This despite $13.2 billion in cash and $17.7 billion in short-term investments.

Jeff Reeves is the editor of InvestorPlace.com, and the author of “The Frugal Investor’s Guide to Finding Great Stocks.” Write him at editor@investorplace?.com or follow him on Twitter via @JeffReevesIP. As of this writing, Jeff did not hold a position in any of the aforementioned stocks.

Article printed from InvestorPlace Media, https://investorplace.com/2012/03/apple-dividend-stocks-berkshire-amazon-google-oracle/.

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