Does Netflix Pay Dividends?

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Q:

Does Netflix pay dividends?

A:

No, Netflix does not pay dividends. Netflix is currently focused on growth. They are concentrated on growing internationally, increasing memberships, and accelerating their original programming. The money that Netflix earns is used to fuel this growth.

Neflix’s  growth strategy is confirmed if you read the latest 2016 annual report. In the report they indicate the following:

We are expanding our operations internationally, scaling our streaming service to effectively and reliably handle anticipated growth in both members and features related to our service, ramping up our ability to produce original content, as well as continuing to operate our DVD service within the U.S.

Will Netflix Pay Dividends in the Future?

There is no indication that Netflix will pay a dividend any time soon. Money earned is going towards growth as management sees this as the best path for shareholders. The 2016 annual report indicates that the company has no immediate plans to pay a dividend. Per the report:

We have not declared or paid any cash dividends, and we have no present intention of paying any cash dividends in the foreseeable future.

Why No Dividend is Currently Good

Netflix needs to continue to grow in order to succeed. Adding customers domestically and internationally means that the company can continue to create original content and add shows to the mix. If the content remains strong, additional people will join and existing customers will stay on-board. Paying out dividends means less money that will go toward expansion since this money will have gone to shareholders. Netflix shareholders should currently focus solely on a potential stock price increase for their return. Of course, there is no guarantee of a return and loss can occur.