What does it mean when a company stops paying dividends? When a company suspends dividend payments, this means that it has canceled the payment it intended to issue to shareholders. This can happen for a period of time or for the foreseeable future, and can disrupt the plans of people who own that company’s shares.
Why would a company choose not to pay dividends? A company that is still growing rapidly usually won’t pay dividends because it wants to invest as much as possible into further growth. Mature firms that believe they can increase value by reinvesting their earnings will choose not to pay dividends.