Pfizer's (NYSE:PFE) more than 40-year streak of raising its dividend came to a close yesterday. The company said next year's dividend would stay at 2008 levels. Should investors care?

Hardly.

Sure, the company won't make it on a few lists, and it might get dropped from an index or two, but investors should care about what's in the best interest of the company right now. Past performance is no indication of future performance, and all that jazz.

The company already has the highest dividend yield, by far, of the big pharmas. Does it really need to go higher?

Company

Trailing Dividend Yield

Pfizer

7.7%

Merck (NYSE:MRK)

5.7%

Bristol-Myers Squibb (NYSE:BMY)

5.5%

Sanofi-Aventis (NYSE:SNY)

5.4%

Eli Lilly (NYSE:LLY)

5.3%

GlaxoSmithKline (NYSE:GSK)

5.2%

Source: Motley Fool CAPS.

Sure, Pfizer could have raised its dividend by a penny or two, as Eli Lilly did. But by not doling out any additional cash, management is basically telling investors that it thinks Pfizer can get a better return on that cash than they can. And with other companies beaten down so much, there are plenty of investments it could make.

It's also possible that Pfizer has cash in all the wrong places. It can't pay the U.S. dividend with foreign cash without incurring taxes on the repatriation. But that cash is still there, and it would certainly be available to make a substantial purchase of a foreign-based company. Global Gains pick Novo Nordisk would be an excellent addition, although it's not particularly cheap right now.

I'm sure that some investors who hold Pfizer just for the dividend think the company should have raised its payout no matter what the circumstances, but that's the wrong kind of thinking. You should own Pfizer in the first place only if you think management can make the right decisions to grow the company's value. Right now, cash is king, and management is smart to hold on to as much as it can.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.