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?
Growth equals more Money
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).
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.
I interpret this question as long term vs short term. It strictly depends on the purpose of the investment.
Growth really means just another CEO bonus
Bad question. The business should be doing both.
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.
I buy stock for dividends. Retirees need the cash. Young people should take risks.
depends on the business and what stage they are at.
Can they alternate?
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. :(
It depends. Growth and dividend equites are in different places.
Both. I would expect a little payment but would also expect them to reinvest some and grow the company.
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...
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...
And they are technically share holders...
As a long-term investor, I prefer growth. If I were close to retirement, I'd prefer dividends.
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.
Depends on the type of company. I would want tech companies to focus more on growth and manufacturers to put more towards dividends.
Both. A high dividend is nice but likely smart. Just solely in growth with no dividend is a risky business.
I own stocks both in trading and in a retirement account. I prefer growth.
A good dividend that you reinvest.
a little of both would be the correct answer.
There is no right answer, it depends on your needs.
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.
Dividend with dividend reinvestment.
That depends on how much I trust the people deciding how to spend the money.
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.
I just watched an Enron documentary. I'll have no part in letting then keep the money for any use.
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.
You're invested in the wrong places then
My tolerance for corruption is slightly lower than the current levels of corruption. Guess that's capitalism ;-)
Dems wants the cash. Same oh same oh.
Why didn't you point out women want the cash?
Some peeps often live off the dividends. Others prefer to grow. Probably very dependent upon age of respondent and their liquidity.
I want my money as much as any other person. If I want to reinvest, it's my choice.
I invest to make money, I always want to reinvest my dividends until a time comes to cash out.
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.
I only invest in gold.
Bwaaa ha ha ha ha! OMg, I'm sorry, but that just cracks me up!
I'm with you there. I want a real company, not a metal.
I feel bad for all the suckers who bought the "end of the world" gold BS the last few years.
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...
I love it when people buy gold because it is being endorsed by their favorite news opinion personality. These people are just idiots.
A mix, but I'm young enough to prefer primarily growth stocks. I reinvest any dividends anyway.
I maybe more interested in a dividend-paying stock when I get closer to retirement.
There is nothing wrong with a good dividend paying stock.
Short-term gains have KILLED American business.
Dodge v. Ford Motor Company, 204 Mich. 459, 170 N.W. 668. (Mich. 1919)
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.
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
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.
I'd prefer growth and rising stocks I could sell to fund my retirement.
Grow but don't invest 100% 100% of the time, or I'll never see a dime.
well the value if the stock would increase and you could sell it.
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...
... newer companies to grow our economy and create jobs.
Definitely growth so that if I need to cash out I'll get more than if I took dividends every now and again.
I like money
who knows if the high-ups in the company know what they're doing. i'll take the dividends.
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.
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...
literally have hundreds of other examples.
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.
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.
Because of the endless cash printing inflation makes cash piles lose money.
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.
Grow it baby!
I have no idea what I just read...
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.
Thank you Cole for explaining.