Dividend-Paying Stocks vs Non-Dividend Paying Stocks
What is Dividend?
Dividends are funded from the company's long-term cash flows and profits each year.
Dividends are funded from the company's long-term cash flows and profits each year.
Dividends are cash payments distributed to shareholders at regular intervals, with semiannual payments (every six months) the most commonly chosen interval in Australia. However, dividends can also be paid monthly, quarterly, or annually, and even on a one-off basis in the case of "special dividends". Alternatively, a company may not pay a cash dividend but instead offer additional shares of stock to shareholders.
Investing in Stocks With Dividends
Investing in dividend-paying stocks is beneficial to shareholders. Investors can receive a fixed income from their equity investment while holding the stocks to further profit from stock prices. Dividends are money in hand as the stock rises and falls in the market.
Investing in dividend-paying stocks is beneficial to shareholders. Investors can receive a fixed income from their equity investment while holding the stocks to further profit from stock prices. Dividends are money in hand as the stock rises and falls in the market.
The dividends paid by large and established companies may not have a huge percentage gain as that of younger companies, but the returns tend to be stable over time.
Investing in Stocks Without Dividends
Why would anyone want to invest in a company that doesn't pay dividends? There could be significant benefits to investing in stocks that do not pay dividends. Companies that don't pay stock dividends often reinvest the money for expansion to boost overall growth, which means their stock prices may appreciate over time.
Why would anyone want to invest in a company that doesn't pay dividends? There could be significant benefits to investing in stocks that do not pay dividends. Companies that don't pay stock dividends often reinvest the money for expansion to boost overall growth, which means their stock prices may appreciate over time.
Companies that do not offer dividends sometimes invest the potential dividend payment cash in so-called "share buybacks" on the open market. If the number of shares on the open market decreases, the company's earnings per share (EPS) will rise in theory. It also increases the percentage of equity owned by each shareholder.
How to Choose?
There are advantages and disadvantages over investing in dividend-paying stocks and non-dividend-paying stocks.
There are advantages and disadvantages over investing in dividend-paying stocks and non-dividend-paying stocks.
Most regular dividend payers are large, established companies that are unlikely to fail. They typically perform better in bear markets than stocks that do not pay dividends and are usually less volatile.
However, investing only in dividend stocks can mean missing out on companies with potentially high investment returns, such as technology and pharmaceutical companies. These companies often do not pay dividends, preferring to reinvest their money to develop new products and services.
Finally, when deciding whether to invest in dividend or non-dividend paying stocks, you should consider your personal financial goals, your overall investment strategy, and risk tolerance in advance.![]()
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Moomoo is an online trading platform offered by Moomoo Inc.. In Australia, financial products and services on moomoo are offered by Futu Securities (Australia) Ltd (ACN 095 920 648) , an Australian Financial Services Licensee (Licence No: 224663) regulated by the Australian Securities and Investments Commission (ASIC).
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Milk The Cow : I preferred non dividend for a "non crisis" market as we Singaporean
/ foreigners get tax 30% on US 
stock
.
JM investor : I prefer non dividend stock in US, dividend stock in Singapore
江南公子 JM investor: same here.