If a widget company is pretty much dominating its total addressable market, any excess cash it has should be used to buy back its shares as a way of returning cash to shareholders rather than try to expand into unrelated businesses.

The market (i.e. the shareholders getting the cash) is a better mechanism at finding new investments than the executive leadership at the widget company. As a widget company investor I invest in their widget making skills, not their skills in essentially starting new businesses.