Show of HandsShow of Hands

Show Of Hands October 15th, 2013 1:28am

You own stock in a profitable company. Would you rather that the company distribute its quarterly profits to its shareholders in the form of a dividend, or invest those profits to further grow the business?

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anarchy GET OFF MY LAWN
10/15/13 9:57 am

At my age, I have a long time before it matters too much...in a steady growth stock, I prefer dividends. If I choose, I can reinvest the dividend back into said stock (and often do).

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ScrewU Gone
10/15/13 6:55 am

Depends on the potential for growth. If there's a new market, or you can capture more market share, or you can sell new products to existing customers then reinvest.

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TiltonAllStarz Outside Ur Comfort Zone
10/15/13 6:23 am

I interpret this question as long term vs short term. It strictly depends on the purpose of the investment.

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TheChoznOne Fort Leonard Wood,MO
10/15/13 4:50 am

Growth really means just another CEO bonus

sanj wild, wild west
10/15/13 4:42 am

Bad question. The business should be doing both.

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robertboston Portland, Maine
10/15/13 5:53 am

Exactly--and it depends on the opportunities for the company. A small, rapidly growing company needs to reinvest profits. An older "cash cow" like a utility should pay dividends mostly.

rons screw politicians
10/15/13 4:01 am

I buy stock for dividends. Retirees need the cash. Young people should take risks.

redrocker Idaho
10/14/13 10:05 pm

depends on the business and what stage they are at.

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ladyniner81 no hope for humanity
10/14/13 9:45 pm

a little of both. I miss my dividend checks though. but most of my stocks, the companies went out of business, one thanks to Obama (GM) oh, well. :(

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cato Santa Barbara, California
10/14/13 9:40 pm

It depends. Growth and dividend equites are in different places.

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think4yourself Not a safe space
10/14/13 9:18 pm

Both. I would expect a little payment but would also expect them to reinvest some and grow the company.

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crewsmissle Florida
10/14/13 9:10 pm

The way the question is worded insulates that the company distribute all of its profits to shareholders. If that were the case how would the company save money? Grow the business? Running constantly 'even' will close a business fast...

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crewsmissle Florida
10/14/13 9:17 pm

It's impractical and nearly impossible for a company to redistribute ALL its profits to share holders. I suppose it is possible for the company to reinvest ALL its profits for growing the business. However board members and CEOs will get bonuses...

crewsmissle Florida
10/14/13 9:17 pm

And they are technically share holders...

dilbert The Dakotas
10/14/13 8:55 pm

As a long-term investor, I prefer growth. If I were close to retirement, I'd prefer dividends.

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jashawa9485
10/14/13 8:48 pm

I usually don't own a stock long enough to benefit from dividends. If I was older and relied on the dividends, then it would be a different story.

Vincere Seattle
10/14/13 8:46 pm

Depends on the type of company. I would want tech companies to focus more on growth and manufacturers to put more towards dividends.

bnnt Los Angeles
10/14/13 8:35 pm

Both. A high dividend is nice but likely smart. Just solely in growth with no dividend is a risky business.

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rebelfury76 No Justice, No Peace
10/14/13 8:18 pm

I own stocks both in trading and in a retirement account. I prefer growth.

brisket Illinois
10/14/13 7:55 pm

A good dividend that you reinvest.

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discer middle of life
10/14/13 7:53 pm

a little of both would be the correct answer.

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studlies idaho
10/14/13 8:33 pm

There is no right answer, it depends on your needs.

cpaswr just say the letters
10/14/13 7:53 pm

It depends on how old/new is the business. If the business is new with a good growth rate, dividends can wait. If this is a company that growth is slowing, then I want dividends that can be reinvested.

Snedegar Michigan
10/14/13 7:48 pm

Dividend with dividend reinvestment.

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jonny323
10/14/13 7:44 pm

That depends on how much I trust the people deciding how to spend the money.

peacenskis Alaska
10/14/13 7:35 pm

Maybe a little of both, but most important is to keep it profitable. Obviously, you need to continue investing some money to keep up with technology, etc. I picked growth over dividend.

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SaintAnger sumkindamonster
10/14/13 7:28 pm

I just watched an Enron documentary. I'll have no part in letting then keep the money for any use.

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wetheslaves Live each moment fully
10/14/13 7:19 pm

We aren't doing either effectively. We aren't investing in our people and we are thinning ourselves out into hollow shells in many places. The CEOs are the ones raking in the profits.

jrw010
10/14/13 8:16 pm

You're invested in the wrong places then

wetheslaves Live each moment fully
10/14/13 9:39 pm

My tolerance for corruption is slightly lower than the current levels of corruption. Guess that's capitalism ;-)

commonman1 Peace
10/14/13 7:14 pm

Dems wants the cash. Same oh same oh.

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RJ1969 SoCal
10/14/13 7:16 pm

Why didn't you point out women want the cash?

doctalk not all who wander r lost
10/14/13 7:05 pm

Some peeps often live off the dividends. Others prefer to grow. Probably very dependent upon age of respondent and their liquidity.

ChubbyWombat The Shire
10/14/13 7:04 pm

I want my money as much as any other person. If I want to reinvest, it's my choice.

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DunkinFrunk Austin area, Texas
10/14/13 7:01 pm

I invest to make money, I always want to reinvest my dividends until a time comes to cash out.

dudley northern Virginia woods
10/14/13 7:01 pm

Depends on long term prospects but I would like both. Good companies can pay dividends and still grow, dividends being a certain percentage of profit.

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RJ1969 SoCal
10/14/13 6:49 pm

I only invest in gold.

Bwaaa ha ha ha ha! OMg, I'm sorry, but that just cracks me up!

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Cole12 ...
10/14/13 6:50 pm

I'm with you there. I want a real company, not a metal.

RJ1969 SoCal
10/14/13 6:52 pm

I feel bad for all the suckers who bought the "end of the world" gold BS the last few years.

Cole12 ...
10/14/13 7:03 pm

I know. The miners have been crushed even more incredibly. Paulson's gold fund is down over 50% for the year. This whole gold thing reminds me of Tulip Mania...

cpaswr just say the letters
10/14/13 7:55 pm

I love it when people buy gold because it is being endorsed by their favorite news opinion personality. These people are just idiots.

Zod Above Pugetropolis
10/14/13 6:46 pm

A mix, but I'm young enough to prefer primarily growth stocks. I reinvest any dividends anyway.

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RJ1969 SoCal
10/14/13 6:47 pm

Good call.

RJ1969 SoCal
10/14/13 6:46 pm

Growth.

I maybe more interested in a dividend-paying stock when I get closer to retirement.

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cpaswr just say the letters
10/14/13 7:56 pm

There is nothing wrong with a good dividend paying stock.

suppressedID That is my secret Cap
10/14/13 6:43 pm

Short-term gains have KILLED American business.

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iluv2fist
10/14/13 6:42 pm

Dodge v. Ford Motor Company, 204 Mich. 459, 170 N.W. 668. (Mich. 1919)

ff180 Kentucky
10/14/13 6:42 pm

Obviously it would depend on the status of the business. If it's a newer business with a large opportunity for growth, the reinvest. Ultimately however, I would expect the business to pay out some dividends eventually.

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DenisC NYC Rome Miami Beach
10/14/13 6:41 pm

Would obviously do a little of both during a a 2-3 year time span . But with today's economic uncertainty, and having to choose one or the other , without a doubt I choose CASH. Let the Corp. take the risk . .....of getting shafted. Not me

TomM
10/14/13 6:38 pm

This is impossible to answer. It depends on whether their projects can give a better return than what I could get elsewhere. This question is like asking if I would prefer something to eat or drink. It depends on whether I'm hungry or thirsty.

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TierasPet
10/14/13 6:38 pm

I'd prefer growth and rising stocks I could sell to fund my retirement.

TierasPet
10/14/13 6:38 pm

Early retirement.

Praetorianus Fair enough.
10/14/13 6:37 pm

Grow but don't invest 100% 100% of the time, or I'll never see a dime.

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newburro New Jersey
10/14/13 10:30 pm

well the value if the stock would increase and you could sell it.

Happy Hong Kong
10/14/13 6:36 pm

If they're a young & expanding company then they should keep the capital for R&D and growing the business's global presence.

If they're an older established company with little opportunity for growth (like a utility) then they should return the capital to shareholders so that they can invest in...

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Happy Hong Kong
10/14/13 6:37 pm

... newer companies to grow our economy and create jobs.

jakecrs905 Long Island, NY
10/14/13 6:36 pm

Definitely growth so that if I need to cash out I'll get more than if I took dividends every now and again.

chrismisen atlanta
10/14/13 6:35 pm

who knows if the high-ups in the company know what they're doing. i'll take the dividends.

Cole12 ...
10/14/13 6:33 pm

My dad has become an "activist investor" with a few smaller companies so I've heard many stories over the years. Trust me, most of these firms are absolutely clueless and can't invest money competently.

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Cole12 ...
10/14/13 6:36 pm

An example: A NYSE-listed stock we follow closely had a pretty successful waste business. Instead of issuing dividends, the CEO chose to invest in golf courses - unprofitable golf courses, might I add. Company now consistently loses money. I...

Cole12 ...
10/14/13 6:36 pm

literally have hundreds of other examples.

Liberty 4,032,064
10/14/13 6:32 pm

It depends on a lot of things. Overall, cash is preferable in the current environment as long as all debts are paid since there really aren't many current opportunities for growth. However, this is largely on the industry/company in question.

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Liberty 4,032,064
10/14/13 6:35 pm

The best thing to do in most cases right now is to pay all debts, then establish a substantial cash reserve to have capital readily available when needed. After that, reward/incentivize your investors with dividends.

lectrik Silly gas guzzling Prius
10/14/13 6:35 pm

Because of the endless cash printing inflation makes cash piles lose money.

Liberty 4,032,064
10/14/13 6:39 pm

That's why the market is up so much and everyone has massive cash reserves: All that printed money and nothing to do with it.

EarlyBird Portland
10/14/13 6:32 pm

Grow it baby!

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MJSeals J.D.
10/14/13 6:32 pm

I have no idea what I just read...

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Cole12 ...
10/14/13 6:41 pm

A dividend is a cash distribution to shareholders in a company. Many larger firms issue these quarterly - Microsoft, for example, currently distributes $0.28/share/quarter.

bamaboy33
10/14/13 7:14 pm

Thank you Cole for explaining.