Boggles me how some people try and defend not paying a dividend...

Boggles me how some people try and defend not paying a dividend for purposes of "tax downsides".

Paying a reasonable dividend has the following benefits for the share price, even if you don't personally want dividends yourself:

• Encourages more retail investment from cashed-up retirees looking for sources of passive income
• Opens up the stock to be added to yield-paying ETFs, of which such funds are continually growing & big drivers of positive share price movement
• Takes some risk out of management making dumb decisions with cashflow, guaranteeing you some actual return
• Allows you to use the money to either reinvest in the stock or allocate towards other stocks you feel are more undervalued at the time

Can pretty much guarantee if KAR added a solid dividend policy the share price would end up rising more than the value of the dividend distributed. Especially on a 'value' stock like KAR, it's not like this is some high-growth tech company.