This article by Helen Huntley of the St. Petersburg Times discusses the trend toward dividend-paying among many public companies.

In the go-go 90s, all the high-flying tech companies and even the low-flying companies were suspending dividends with the theory that they could reinvest that cash to keep building their companies--and, presumably, building their stock prices as well.

That was fine until the market went kablooey, and it's been a bumpy road ever since. Now that people can't trust that the market will go up indefinitely, they'd like companies they own a piece of to start sharing the wealth, and more and more companies are responding. (The article mentions quite a few companies that are generous with dividends.)

I think there's a reason besides the uncertainness of the stock market that companies have started paying dividends again--they've proven they don't know what to do with their money.

In concept, it's great to keep profits around to fund a company's expansion. But throughout the dot-com era and even afterward, it was not uncommon to see a big public company buying smaller companies willy-nilly, with no clear reasoning from a dollars and cents perspective. The purchased companies might offer some new service that would marginally complement the public company's offerings, but it often seemed it was just an excuse to take all this cash the companies were generating and make it appear that they were doing something.

A lot of the tech companies spring to mind, but I think it was happening everywhere.

Shareholders have caught on. Instead of watching companies they own spend $150 million to buy a questionable company with questionable technologies and no profits, shareholders are saying, "give it to us, you don't know what you're doing."

That's a good thing, because it forces these public companies to concentrate on the business that allowed them to go public in the first place, instead of saying "it's a shame to have $200 million sitting around, what could we buy?"