Will Netflix Ever Pay A Dividend? – Sure Dividend

Up to date on June twenty seventh, 2025 by Bob Ciura

Whether or not an organization ought to pay a dividend relies on many elements. Hundreds of publicly-traded corporations pay dividends to shareholders, and a few have maintained lengthy histories of elevating their dividends yearly.

Corporations don’t resolve to start paying a dividend in a vacuum. There are a lot of points to be thought of earlier than returning capital to shareholders with a dividend.

Nonetheless, many corporations pay dividends to shareholders; some have even managed to pay and improve dividends for many years.

For instance, the Dividend Aristocrats are a choose group of 69 shares within the S&P 500 which have raised their dividends for 25+ years in a row.

You may obtain an Excel spreadsheet of all Dividend Aristocrats (with metrics that matter, corresponding to price-to-earnings ratios and dividend yields) by clicking the hyperlink beneath:

Disclaimer: Certain Dividend is just not affiliated with S&P World in any manner. S&P World owns and maintains The Dividend Aristocrats Index. The knowledge on this article and downloadable spreadsheet relies on Certain Dividend’s personal overview, abstract, and evaluation of the S&P 500 Dividend Aristocrats ETF (NOBL) and different sources, and is supposed to assist particular person buyers higher perceive this ETF and the index upon which it’s primarily based. Not one of the data on this article or spreadsheet is official information from S&P World. Seek the advice of S&P World for official data.

However, different corporations don’t pay a dividend proper now and won’t for a really very long time (or ever).

Corporations which are nonetheless within the early progress section of their improvement typically select to reinvest extra capital again into their enterprise as an alternative of returning it to shareholders.

In any case, each greenback paid out in dividends is one much less greenback out there to develop the enterprise.

Netflix (NFLX) is a wonderful instance of this, as the corporate doesn’t presently pay a dividend and hasn’t because it went public in Might of 2002. This doesn’t imply that buyers ought to at all times keep away from non-dividend-paying shares.

Associated: Dividend shares versus progress shares.

Many tech shares have initiated dividend funds over the previous decade as they’ve matured and now generate sturdy earnings. Buyers may very well be questioning if Netflix will ever pay a dividend.

Enterprise Overview

With greater than 300 million members unfold out over practically 200 nations, Netflix is a media big. Whereas Netflix does provide all kinds of second-run tv programming and films, the corporate additionally produces its personal authentic content material.

The corporate started with humble beginnings by mailing out DVDs to subscribers. However now its focus has shifted to streaming companies over the web. Subscribers have entry to Netflix’s library of TV collection, documentaries, and have movies throughout practically each style conceivable.

As well as, the corporate has spent closely on creating its personal content material, which was crucial to Netflix’s success at rising its subscriber base by a excessive price. The corporate additionally holds the main share of complete U.S. TV time.

This resulted in huge income progress over time. Netflix’s annual income greater than tripled from 2016 to 2021, reaching $39 billion in 2024.

Within the 2025 first quarter, income elevated 12.5% year-over-year to $10.54 billion. Earnings-per-share rose 25% year-over-year to $6.61 per share.

Given its sturdy earnings progress, buyers would possibly suppose that the corporate would contemplate paying a dividend to shareholders, however Netflix has not paid a dividend so far. A part of this rationalization is that the corporate continues to be not as extremely worthwhile because it may very well be.

Consensus estimates for 2025 are for earnings of $25.32 per share for Netflix, representing an earnings yield of simply ~2.1%.

In different phrases, if Netflix have been to distribute nearly all of its annual earnings-per-share as a dividend, it could generate a 2.1% dividend yield.

After all, it could not do that as a result of it could deprive the corporate of money to put money into progress and debt compensation. Content material prices are excessive, which is a giant motive why Netflix doesn’t pay dividends.

Causes For Paying A Dividend

Many corporations pay dividends as they’re an vital a part of their capital allocation packages. Some corporations, corresponding to Dividend Aristocrats like Coca-Cola (KO) and Johnson & Johnson (JNJ), have elevated their dividends for a number of consecutive a long time.

In reality, each Coca-Cola and J&J are members of the unique Dividend Kings listing.

Even corporations which have been traditionally reluctant to pay dividends have begun to take action in recent times. That is significantly true amongst know-how corporations, which used to spend closely to develop their companies however now have began to make use of dividends as a solution to return capital to shareholders.

Tech corporations like Alphabet (GOOGL) and Meta Platforms (META) have initiated dividends not too long ago as a result of their shareholder bases demanded a dividend, and their enterprise fashions generated constant free money movement.

It is extremely comprehensible why these buyers would need corporations to pay dividends. As inventory costs fall in a market downturn, dividends present a cushion in opposition to paper losses.

Additionally they enable buyers who reinvest dividends to buy extra shares at decrease costs, thus growing their general dividend earnings. When markets rise once more, dividends solely add to shareholder returns.

Dividends are additionally a beneficial supply of earnings for retirees. Dividends will help retired buyers exchange the earnings they misplaced once they have stopped working.

Life’s bills proceed even when folks not obtain a paycheck from their employer. Because of this, dividends generally is a crucial element of a retirement planning technique.

Nonetheless, progress corporations like Netflix differ from time-tested dividend shares like Coca-Cola and Johnson & Johnson as a result of they nonetheless must spend huge quantities of capital on content material to develop.

It is a crucial expense if Netflix plans to not simply keep however develop its subscriber base sooner or later.

The corporate has to compete with rivals within the leisure trade like Amazon (AMZN), YouTube, Hulu, and The Walt Disney Firm (DIS), and plenty of others, making it probably that spending charges will solely rise from right here.

As well as, worldwide progress is a progress catalyst for Netflix that requires important capital funding. An instance of that is the UK, the place Netflix is now producing exhibits and films.

This funding is giving Netflix a rising share of TV time. In line with Netflix, it now instructions a TV share of 9%, up a full share level from the identical quarter final 12 months.

Supply: Investor Presentation

On account of its continued content material funding, Netflix might by no means pay a dividend to shareholders.

Will Netflix Ever Pay A Dividend?

Whereas there are definitely good causes for paying a dividend, there stay legitimate causes for not doing so. Paying a dividend requires the money movement wanted to cowl funds.

Corporations that don’t provide constant free money movement, like Netflix, would wrestle to seek out the money to return to shareholders on a quarterly foundation.

Whereas the corporate technically may pay a dividend primarily based on its rising earnings-per-share, Netflix continues to make use of its money movement on progress initiatives to extend its pool of subscribers.

Due to this, Netflix has didn’t generate optimistic free money movement progress on a constant foundation. The corporate expects to be free money movement optimistic this 12 months and past, which is an enchancment because it often is typical for Netflix to submit detrimental free money movement.

Utilizing massive quantities of capital additionally implies that Netflix has to entry debt markets in an effort to maintain spending. This has impacted the corporate’s steadiness sheet, providing one other impediment to a future dividend cost.

For instance, Netflix’s long-term debt elevated to $14.01 billion within the 2025 first quarter, from $13.79 billion on the finish of 2024. Complete liabilities stand at simply over $28 billion.

This debt makes it harder for Netflix to supply shareholders a dividend.

Primarily based on all of the above, a dividend might not be the fitting alternative for Netflix, provided that its funding spending and debt compensation stay a lot increased priorities for administration.

Closing Ideas

How an organization allocates capital is just not set in stone. A capital allocation coverage will be modified over time. As a progress enterprise matures, it might resolve that paying a dividend is an efficient use of capital.

As soon as an organization reaches constant profitability, administration might resolve {that a} dividend may entice new shareholders and reward current buyers.

It’s attainable that Netflix may ultimately make the identical determination that many different tech shares have by way of a dividend, however it’s not probably.

For now, Netflix has many rivals, which suggests it nonetheless wants to make use of each greenback out there to proceed to create authentic content material.

And with a big quantity of debt on the steadiness sheet, buyers shouldn’t anticipate to obtain dividend funds from the corporate any time quickly.

For all these causes, it stays unlikely that Netflix can pay a dividend within the subsequent a number of years.

See the articles beneath for an evaluation of whether or not different shares that presently don’t pay dividends will at some point pay a dividend: