/biz/ - Business & Finance

>>57122769
In theory research suggests dividend payments alone don't have much impact on a stock's total return over the long term. Whether the company holds it as cash or pays it out the value of that asset should be the same.

On the other hand, market pricing isn't perfectly efficient and dividend paying stocks do outperform the average even if the reason for their outperformance isn't necessarily the fact that they pay a dividend per se. Pic related comes from a report by JP Morgan's equities group. Probably the need to be a profitable company that makes long term projections of what kind of dividend payments they can afford using privileged insider information is what makes dividend paying companies perform better than the pure math would suggest.