5 Stocks That Should Start Paying Dividends

Investors tend to be drawn to hot technology and biotechnology stocks for their growth prospects – not for the cash they return to shareholders.

People is counting money.
(Image credit: Getty Images)

Investors tend to be drawn to hot technology and biotechnology stocks for their growth prospects – not for the cash they return to shareholders. But several well-known tech and biotech stocks could afford to invest in their businesses, buy back their shares and pay dividends, if only they chose to.

When it comes to returning cash to shareholders, corporate management often prefers stock buybacks to dividends because it gives them flexibility. A company can adjust its share repurchases according to business and market conditions. A dividend is a commitment. The market often exacts severe and swift revenge if a company cuts or suspends its payout.

The initiation of a dividend can also be taken as a sign that a company or stock’s best days are behind it. A quick look at Apple’s (AAPL) performance shows that’s not necessarily the case. The company reinstated its dividend in 2012 after a 17-year hiatus. Between price appreciation and payouts, Apple stock has delivered a total return of about 170% since March 2012, when it announced plans to reinstate its dividend later that year – the Standard & Poor’s 500-stock index is up about 130% over the same span, including dividends.

The following five stocks don't yet offer dividends, but they should ... and could. Each has the cash-generation ability to start a regular payout without giving up on share repurchases and investments in future growth.

Data is as of Aug. 3, 2018. Companies are listed in alphabetical order. Analysts’ ratings provided by Zacks Investment Research.

Dan Burrows
Senior Investing Writer, Kiplinger.com

Dan Burrows is Kiplinger's senior investing writer, having joined the august publication full time in 2016.


A long-time financial journalist, Dan is a veteran of SmartMoney, MarketWatch, CBS MoneyWatch, InvestorPlace and DailyFinance. He has written for The Wall Street Journal, Bloomberg, Consumer Reports, Senior Executive and Boston magazine, and his stories have appeared in the New York Daily News, the San Jose Mercury News and Investor's Business Daily, among other publications. As a senior writer at AOL's DailyFinance, Dan reported market news from the floor of the New York Stock Exchange and hosted a weekly video segment on equities.


Once upon a time – before his days as a financial reporter and assistant financial editor at legendary fashion trade paper Women's Wear Daily – Dan worked for Spy magazine, scribbled away at Time Inc. and contributed to Maxim magazine back when lad mags were a thing. He's also written for Esquire magazine's Dubious Achievements Awards.


In his current role at Kiplinger, Dan writes about equities, fixed income, currencies, commodities, funds, macroeconomics and more.


Dan holds a bachelor's degree from Oberlin College and a master's degree from Columbia University.


Disclosure: Dan does not trade stocks or other securities. Rather, he dollar-cost averages into cheap funds and index funds and holds them forever in tax-advantaged accounts.