The Reason Why Stock Dividend Is Bad And Meaningless

Discussion in 'Stocks' started by fiftium, Mar 21, 2021.

  1. fiftium

    fiftium

    Many people think getting stock dividend is an advantage, and prefer dividend-paying stocks instead of non-dividend stocks.

    This video uses SPY to explain why it is not the case. On the dividend paying date, SPY dropped more than SPX. The difference was due to the paid dividend.

     
  2. maxinger

    maxinger

    It is the other way round.

    Many people think getting stock dividend is a disadvantage, and prefer non dividend-paying stocks instead of dividend stocks.
     
    VPhantom and murray t turtle like this.
  3. %%
    ALL most always a disadVantage=dividends..............................................................as far as % gainers.
    Some exceptions,XOM,CVX + other tech dividends ETFs can be worth it......
    Even though i buy xom gas, thats mainly because there are many more xom stations since they bought out BP here; + gave me ''free'' air + water..........................................................................................XOM traders coffee costs to much/only bought that overpriced coffee once
     
  4. padutrader

    padutrader

    dividend payment is proof that the company has positive cash flow.......
     
    VPhantom and murray t turtle like this.
  5. jharmon

    jharmon

    So much fail in this thread on terminology - especially you Fiftium. Shame.

    Stock dividends are not paid in cash - they are paid IN STOCK. It's basically a tiny stock split. It has no impact on the company's finances at all, and just dilutes shareholdings.

    Cash dividends are paid in cash. The paid date is irrelevant. It's the ex-date that matters. Ever heard of accrucal accounting?
     
  6. vanzandt

    vanzandt

    Like XOM?
     
    Overnight likes this.
  7. deaddog

    deaddog

    You invest for dividends.
    You trade for capital gains.
     
  8. ph1l

    ph1l

    Not always.
    https://www.business-standard.com/a...-firms-have-cash-deficits-113120600850_1.html
     
  9. Overnight

    Overnight

    Well aren't you a financial genius. Can you please tell me why I bought a bunch of dividend stock last year, at beginning of February 2020, are at BE right now? Hmmm! I bet you will have no answer for that. AAPL and XOM for example. Care to explain that BS?
     
  10. jharmon

    jharmon

    I was pointing out the OP's terminology is incorrect. I have no view on why you bought something or how they performed. Only you can answer that. Not sure why you're asking me.

    Seems like you don't have much of a trading plan though.
     
    #10     Mar 22, 2021
    VPhantom likes this.