Cash has never been required to pay dividends. C.f. “stock dividends.” More rarely, other companies have issued warrants. But stock dividends were extremely common - especially when marginal income tax rates were higher, since a cash dividend creates a tax liability NOW, whereas a dividend in the form of stock allows the shareholder to control when he realizes the tax liability.

“Please don’t ever advise that P/E is a meaningful ration [sic]”

Dude. Post your portfolio.

I’d like to short it.

Twit.

Take it up with Warren Buffett and Benjamin Graham. They’ll tell you the exact same thing. Wanna call them morons?

If a company issues a dividend, they’re telling you they can’t beat the market with your money…at least with that portion of earnings they return to shareholders.

Put another way, grasshopper, if you could make your stock price go up by issuing dividends, everybody would do it and nobody would reinvest capital.

Watch who you’re calling “morons,” kid. There are some people out there who can think beyond the bumpersticker catchphrase.

People don’t invest in Google to get dividends. They invest in Google b/c they believe that the share value of the stock will rise and that they can then sell at some later date to make a profit.

The reason, more or less, that companies pay dividends is b/c they either aren’t pursuing growth or b/c they believe that they have maximized their growth potential.

The first rule of corporate finance says that profit is an opinion and cash is a fact. Thus anybody with any knowledge of finance knows that profit and cash are nowhere near the same thing. Profits aren’t required to pay dividends, only cash.

Sorry but somebody has to set the record straight.

PS. Please dont ever advise people that a PE ratio is a meaningful ration. tia.

Is Google started issuing dividends, their stock price would PLUMMET!!! That’s because their stock price isn’t justified by their earning power, or the NPV of their ability to pay dividends. The Google stock price is only justified by the belief that they have the ability to do SOMETHING with the cash that will generate extraordinarily higher returns than they currently are. That may be via growth, or a new product offering, or a series of acquisitions.

If Google gives back cash, then they’re saying they have no more ideas of what to do, how to expand. Shareholders would rightly sell off.

Seriously, Google giving out dividends? It’s really not a very bright idea…

Actually, if Google cut a dividend, that might - MIGHT - be seen as a bearish sign for Google, since investors thought they were buying into a company that planned on reinvesting aggressively for growth. That would be the only reason I’d want GOOG at these prices.

If Google cuts a melon, they become just another S&P500 stock. Well, if its dividends I wanted, I’m more likely to snag a nice bank, like WM or BA or C, at a much more reasonable valuation.

Google is way too fashionable right now.