which companies pay dividends 
companies that pay dividends typically enjoy stable cash flows and their businesses are commonly beyond the growth stage this business growth cycle partially explains why growth firms do not pay dividends they need these funds to expand their operations build factories and increase their personnel certain dividend paying companies may go as far as establishing dividend payout targets which are based on generated profits in a given year for example banks typically pay out a certain percentage of their profits in the form of cash dividends if profits decline the dividend policy can be amended or postponed to better times cash dividends are a common way for companies to return capital to shareholders accounting for cash dividends