Go For The Dividend Paying Companies : Barron’s Reports

Dividends accounted for more than 100% of the S&P 500 returns for the past 10 years. Despite this, several big companies such as Google (NASDAQ: GOOG), Ebay (NASDAQ: EBAY) and Apple (NASDAQ: AAPL) do not pay any dividends.

Fifteen of the top 100 S&P 500 companies do not pay any dividends. These companies are sitting on considerable cash reserves; therefore it is difficult to comprehend their motivation for not paying dividends. Most of these companies have stated that they prefer to repurchase their shares.

However, there are many companies such as Johnson & Johnson (NYSE: JNJ) and PepsiCo (NYSE: PEP) which not only pay good dividends, but also buy back their stocks. Another reason may be that these companies do not want to suffer the embarrassment of decreasing or halting their dividends during difficult times.