Will Adobe Ever Pay A Dividend?

Income investors tend to focus their attention on dividend stocks. This is largely due to the fact that these stocks provide income to shareholders regardless of the economic conditions. Some companies cut their dividends when times get tough, but many, including the Dividend Aristocrats tend to continue to distribute dividends even during recessions.

The downside of this focus is that income investors can often miss out on companies with incredibly high growth rates simply due to the lack of a dividend.

One company that doesn’t pay a dividend, but has seen its business and share price grow at an exceptionally high rate is Adobe Inc. (ADBE). Shares of the company have generated annualized returns of 32% over the last decade. A $10,000 investment in Adobe in 2010 would be worth almost $168,000 today.

While there is no doubting Adobe’s growth over the last decade, income investors interested in the company likely want to know if the company will ever pay a dividend. This article will review Adobe’s business model, its prospects for growth, and competitive advantages to determine if shareholders can expect a dividend any time soon.

Business Overview

Adobe offers a wide variety of computer software products that allow users to create, transfer and print electronic documents. The company is composed of three business segments. The Digital Media segment provides tools and solutions for users to create, publish, promote and monetize digital content.

The Digital Experience segment provides products and solutions for the creation, management, measuring and optimizing of customer experiences in a variety of areas. The Publishing segment’s portfolio of products and services includes technical document publishing, web application development and high-end printing.

The company was founded in 1982 and changed its name from Adobe Systems Incorporated in 2018. Adobe trades with a market capitalization in excess of $225 billion and generated more than $11.2 billion in revenue last year.

The company’s leading software products include Photoshop, Illustrator, Acrobat and InDesign. Adobe also offers a subscriptions service, called the Creative Cloud, that allows for access to the latest version of all of its creative products.

Growth Prospects

Adobe’s bundling of its content creation software into the Creative Cloud has made a one-stop-shop for customers.

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Disclosure: Sure Dividend is published as an information service. It includes opinions as to buying, selling and holding various stocks and other securities.

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