The Intelligent Investor - The Definitive Book On Value Investing

the percentage of companies paying dividends (shown in the dark

area) has withered away:

504 Commentary on Chapter 19

FIGURE 19-1

Who Pays Dividends?

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1973–1977 1978–1982 1983–1987 1988–1992 1993–1998 1999

Annual averages

% of all U.S. stocks

Never paid

Former payers

Payers

Source: Eugene Fama and Kenneth French, “Disappearing Dividends,”

Journal of Financial Economics,April 2001.

But Daddy Knows Best was nothing but bunk. While some compa-

nies put their cash to good use, many more fell into two other cate-

gories: those that simply wasted it, and those that piled it up far faster

than they could possibly spend it.

In the first group, Priceline.com wrote off $67 million in losses in