Some folks believe if a fast-growing company pays out a dividend, it will signal to investors that the stock is no longer a growth stock, and it will lose its growth premium. Arguably, however, some fast-growing companies simply generate too much cash to hoard it all -- companies like Google (NASDAQ:GOOGL).
What should Google do with its idle cash? Fool contributor Daniel Sparks thinks Google should return some of it to shareholders. He explains that some businesses simply deserve a premium valuation because they are excellent businesses. Additionally, he gives investors three concrete reasons why Google should pay a dividend.
Fool contributor Daniel Sparks has no position in any stocks mentioned. The Motley Fool recommends Google. The Motley Fool owns shares of Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.