The payment of dividends is only one element to consider in investing in stocks. Investing companies that do not pay dividends should not matter seriously, in the short.
This is true if companies are using the profits to grow the business.
Capital gain is the most important return investors look for in buying stocks. In the long run stocks that don’t pay dividends tend to grow faster than most, but ultimately they will make dividend payments to their shareholders, thus increasing the return on investment.
The most important factor in buying stocks is whether their values are relatively low enough to make for a profitable investment down the road. At the same time, investors should not only look at a company by itself and compare the likely growth with other stocks, with the ones showing the greatest potential being invested in.
If income is the main objective, then investors would need to look to those stocks paying the h level of dividends relative to the stock price.
Non-dividend stocks as investments?
January 27, 2017 by
