US Dividend Payers vs Non-Dividend Payers

Ever wonder what the difference is between companies that pay dividends and those that do not? I ran two screens with the same six criteria and a variable seventh criteria (dividend yield > 0 vs dividend yield = 0). There were 24 companies that had a dividend yield greater than 0%, while only 14 companies who did not pay a dividend. Below are the common criteria to both screens along with the results of the queries.

- Listed on a major US stock exchange

- Market capitalization in excess of $1B

- Net Income 5-year CAGR > 10%

- Revenue 5-year CAGR > 10%

- P/E (trailing LTM) < 15X

- FCF LTM > 0

US Dividend Payers

US Non-Dividend Payers




Within the dividend blogging community, most of the names on the dividend payer list are pretty common. It is rare day that I do not see a tweet about Apple or T.Rowe Price on my Twitter feed. In contrast, outside of a couple of airlines (Ryanair and JetBlue) and American Axle who I used to analyze in a past job, the names on the second list are mysteries to me. Clearly, the non payers have been able to grow their businesses at impressive rates over the past five years, which makes me wonder why they have not rewarded their shareholders with a dividend. As as a dividend investor, the only justification I would find reasonable for not paying a dividend given such impressive business results is that a company that operates in a cyclical industry in which management must save during boom years to cover expenses/investments during down years.

My question to all the dividend investors out there is if there are any metrics that would convince you to invest in a company that does not pay a dividend? I look forward to reading your answers!