Why might a company choose not to pay dividends even when it has sufficient profits?

A company might choose not to pay dividends, even when it is profitable, primarily to reinvest in the business for growth and expansion. This strategy often involves using available profits to fund new projects, research and development, or capital expenditures that can lead to increased revenue in the future. By prioritizing reinvestment over dividends, the company aims to enhance its competitiveness and market position, potentially leading to greater long-term returns for shareholders.

Focusing on growth can make the company more attractive to investors who prioritize long-term value generation over immediate payouts. Additionally, retaining earnings for expansion can signal to the market that the company is confident in its future prospects, which may positively influence the company's stock price. Overall, choosing to reinvest profits rather than distribute them as dividends aligns with a strategic plan for sustainable growth.