"Reinvesting divdends generates typically around 50% more growth over time?"

What does that mean? Why would I reinvest my dividends in the company? It's the exact same if they just left it in the stock and didn't pay dividend. Over time is very vague too, over 10 years or what? Specifics matter when talking % gain.

"There are long stretches where dividend players outperformed growth stocks"

Anything to back that up?

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Posted by CecilShortsHisPants

One Foty Fo uh uh Magnolia Screet

Member since Oct 2012

2930 posts

Posted on 4/18/24 at 4:23 am to Saunson69

quote:
What does that mean? Why would I reinvest my dividends in the company? It's the exact same if they just left it in the stock and didn't pay dividend.

Its not the exact same. Your share of the company increases as you reinvest dividends.
That’s the logic…. Even though, yes, a larger share of a smaller company = a smaller share of a larger company.

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Posted by slackster

Houston

Member since Mar 2009

85487 posts

Posted on 4/18/24 at 6:31 am to Saunson69

quote:
Anything to back that up?

LINK

quote:
For an average holding period of 1 year, dividends accounted for 27% of total returns for the S&P500 since 1940. If we increase the holding period to 3 years, dividends account for 38%, 5 years it increases to 42%, over a 10 year period it rises to 48%, and with a 20 year holding period dividends account for some 60% of total returns. It is important to note, too, that here we are just looking at the S&P500 as a whole and not focusing purely on companies that actually pay a dividend. If we did, we think these results would likely be even more striking.”

Additionally, it’s disingenuous to complain about dividend payers being a simple return of capital and not on capital without acknowledging how large share buybacks have become.

Nearly every major non-dividend payer has bought back stock, which is essentially the same logic.

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Posted by tigerfoot