I Hate to Say It, but Disney Shouldn't Reinstate Its Dividend

Disney (NYSE: DIS) did something important recently. It declared a dividend for the first time since the payment was eliminated during the early days of the coronavirus pandemic. There are a few big takeaways, but I can't help but think the company should have waited to start paying a dividend again. Here's why, despite being a dividend lover, I'm not particularly pleased with Disney's move.

When the pandemic hit in 2020, there was a great deal of uncertainty. Nonessential businesses were shut down by the government and people were asked to practice social distancing, all in an effort to slow the spread of the illness. Given that a huge portion of Disney's business is tied to group settings -- like its amusement parks, cruise ships, and the movie theaters that show its movies -- it makes sense that the company suspended the dividend.