Does Chipotle Pay Dividends?

Q:

Does Chipotle pay dividends?

A:

No, Chipotle (CMG) does not pay dividends. The company is using their retained earnings mainly for expansion and share buybacks as reflected in the latest 2016 Chipotle Annual Report. Per the report:

We are not required to pay any dividends and have not declared or paid any cash dividends on our common stock. We intend to continue to retain earnings for use in the operation and expansion of our business and to repurchase shares of common stock (subject to market conditions), and therefore do not anticipate paying any cash dividends on our common stock in the foreseeable future.

While some of Chipotle’s retained earnings are going toward share repurchases, the repurchases are not significant. Per the annual report, the repurchases totaled $813,881, $485,841, and $87,996 for 2006, 2015, and 2014, respectively. As of the end of fiscal year 2016, the company was permitted to repurchase up to $2,100,000 shares in aggregate.

We project that Chipotle will not pay dividends in the foreseeable future. The primary focus of the company is on growth and the earnings will be used to help fuel this growth. Shareholders should only expect to receive a potential return through an increase in the stock price. As or if the company matures through the years and growth slows down, a dividend may become more realistic.

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