15 Biggest Companies That Don’t Pay Dividends
In this article we are going to list the 15 biggest companies that don’t pay dividends. Click to skip ahead and read the 5 biggest companies that don’t pay dividends. Although these top companies are recognized by most of the general public, many people do not realize just how many people are involved or directly affected by a company’s success or failure. When an employee fails at his job, only his salary or reputation is affected. When a company fails, everyone from the employees to shareholders to the customers is affected in some capacity or another. However, in the same way, a company’s success also benefits all the people involved in the business.
The practice of paying dividends is one way that the top companies of the world can give back to their shareholders. Typically, a set amount of money per share is paid to shareholders with respect to the number of shares they own. This money is obtained from the profits the company has made. This amount can beany percentage of the net profit of the company, and is generally expressed as a percentage of the face value of the share. The decision of how much to pay is entirely the company’s discretion, and standards for which percentage is ideal also varies based on the industry or market the company is a part of. However, what is typically universal is the existence of shareholders in a company. When a person buys shares in company, he or she is now a member of the corporation and has some ownership attached, making him or her a shareholder. Every company has shareholders, but not every company rewards their shareholders with dividends.
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This brings us to our list of 15 biggest companies that don’t pay dividends. Although paying dividends is indeed a very common practice, there are still many companies in the world that do not follow it. For some, this is a decision that has been a standard since the company began. These companies have never paid dividends to their shareholders and are transparent in their intent to not do so in the future. However, others have made the decision to not pay dividends only recently, most commonly a direct result of the Covid-19 pandemic affecting the company’s profits. Although some may find it difficult to believe, it is true that a company may be one of the best in the world but still struggle with making a profit. To see this in more detail, check out the 15 biggest companies that aren’t profitable.
Many people who learn about the practice of not paying dividends may wonder about the reasoning behind it. Why would a company even enforce such a rule? There may be several reasons why a company does not pay dividends, but the most common would be that they believe their profit is better spent on something else. Some companies prefer to spend most of their cash back into the business, spending on operations to further grow the company. The reasoning behind this is that if the company grows, the share price will increase, eventually benefitting shareholders. Other companies would rather keep cash so they can spend on acquisitions, or the act of purchasing another company.
So, it is not true that only those companies that do pay dividends will be successful and attract people to buy shares. In fact, in this article you will see the names of many very famous corporations which you can recognize. You probably never even imagined that they could be among those companies that don’t pay dividends to their shareholders. To prepare their ranking, we have used Fortune Global 500 as our source, ranking the companies based on revenue, assets, profits and employees of the company. So let's look at the biggest companies that don’t pay dividends, starting with number 15:
15. Alibaba (NYSE:BABA)
Total revenue of the company in 2019 (in millions of dollars): 73,166
Total profits of the company in 2019 (in millions of dollars): 21,450.2
Total assets of the company in 2019 (in millions of dollars): 185,026.5
Total employees of the company in 2019: 122,399
An e-ecommerce giant based in China, Alibaba is a highly profitable company with high growth and yet historically, it has never paid a dividend. Instead, the company rewards its shareholders with its rising share price.
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14. Aegon
Total revenue of the company in 2019 (in millions of dollars): 75,344
Total profits of the company in 2019 (in millions of dollars): 1,386.8
Total assets of the company in 2019 (in millions of dollars): 494,246.6
Total employees of the company in 2019: 23,757
This Dutch Insurance Company made an announcement to suspend its dividend considering the current economic situation caused by the Coronavirus pandemic. This was in response to a similar recommendation put forward by The European Insurance and Occupational Pensions Authority earlier.
Pixabay/Public Domain
13. Boeing Co (NYSE:BA)
Total revenue of the company in 2019 (in millions of dollars): 76,559
Total profits of the company in 2019 (in millions of dollars): -636
Total assets of the company in 2019 (in millions of dollars): 133,625
Total employees of the company in 2019: 161,100
Boeing may be one of the top aircraft manufacturers by revenue of the world, but the company has suffered tremendous losses in the past two years alone. From cutting almost 20 percent of the workforce to suspending dividends, Boeing is doing what it can to stay afloat amid the pandemic.
Pixabay/Public Domain
12. Airbus
Total revenue of the company in 2019 (in millions of dollars): 78,883
Total profits of the company in 2019 (in millions of dollars): -1524.4
Total assets of the company in 2019 (in millions of dollars): 128,412,7
Total employees of the company in 2019: 134,931
It should come as no surprise that aviation companies such as Airbus have been hit hard by the Coronavirus pandemic. The company faced a loss in both 2019 and 2020 and decided to suspend dividends for 2019 to “protect the future of airbus”, as said in a statement by the Airbus Chief Executive Officer Guillaume Faury.
Pixabay/Public Domain
11. JD.com
Total revenue of the company in 2019 (in millions of dollars): 83,505
Total profits of the company in 2019 (in millions of dollars): 1,763.7
Total assets of the company in 2019 (in millions of dollars): 37,286.1
Total employees of the company in 2019: 228,730
Standing as one of the top e-commerce companies in the world, it may be surprising to know that this Chinese retailer has never paid a dividend. Like other companies on this list, JD.com prefers spending profits on reinvesting into the business, to allow the company to grow even further.
10. Peugeot
Total revenue of the company in 2019 (in millions of dollars): 83,643
Total profits of the company in 2019 (in millions of dollars): 3,582.7
Total assets of the company in 2019 (in millions of dollars): 78,305.4
Total employees of the company in 2019: 214,478
The French automotive manufacturer recently released a joint statement with Fiat Chrysler Automobiles informing of their decision not to distribute a dividend for 2019. The two companies are currently in a merger. Their decision, like many others on this list of biggest companies that don’t pay dividends, is a result of the current economic situation caused by the coronavirus pandemic.
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9. BNP Paribas
Total revenue of the company in 2019 (in millions of dollars): 85,058
Total profits of the company in 2019 (in millions of dollars): 9,147.7
Total assets of the company in 2019 (in millions of dollars): 2,429,673.9
Total employees of the company in 2019: 194,001
France’s largest bank by assets announced its decision to cancel its dividend for 2019. Many other large banks across Europe have made similar declarations, all following advice put forth by the European Central Bank, as a precaution during the Covid-19 crisis.
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8. Bankco Santander
Total revenue of the company in 2019 (in millions of dollars): 88,257
Total profits of the company in 2019 (in millions of dollars): 7,292
Total assets of the company in 2019 (in millions of dollars): 1,709,072.9
Total employees of the company in 2019: 189,769
Following the same advice of European Central Bank, this Spanish bank announced its decision to cancel the final dividend for 2019 as well as its dividend policy for 2020. This will remain in effect "until there is more visibility of the effects of the Covid-19 crisis and the 2020 results are known," it said.
Pixabay/Public Domain
7. Aviva
Total revenue of the company in 2019 (in millions of dollars): 89,647
Total profits of the company in 2019 (in millions of dollars): 3,251.4
Total assets of the company in 2019 (in millions of dollars): 609,327
Total employees of the company in 2019: 31,181
The British Multinational insurance company announced its decision to suspend its final dividend for 2019. This announcement was made through their website, citing the reason for this decision as “significant uncertainties presented by Covid-19.”
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6. Dell Technologies (NYSE:DELL)
Total revenue of the company in 2019 (in millions of dollars): 92,154
Total profits of the company in 2019 (in millions of dollars): 4,616
Total assets of the company in 2019 (in millions of dollars): 118,861
Total employees of the company in 2019: 165,000
The American tech giant increased its sales for the last fiscal year by 2 percent. Historically, the company has avoided dividends and has instead conducted stock buybacks to enable cash flow to shareholders.
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Disclosure: No position. 15 biggest companies that don't pay dividends is originally published at Insider Monkey.
