Companies, paying dividends, shine out of whole universe of companies.
Dividend is a part of company’s profits, distributed to its shareholders. Dividend per share is the amount of euros or other currency each share is granted.
Regular income for owning stock
When company pays dividend first of all it means that company has money to do it. It also means that company truly cares about its shareholders, rewards them for owning stock.
Dividends can grow
Company pays you part of its profit and keeps the rest to ensure the future growth. Many companies increase their dividends each year. Over long term this has significant positive effect on your investment returns.
Dividend growth indicates that company has real growth. Usually managers would not increase dividend if they are not sure there are resources to support it in the future.
Dividend growth leads to stock price growth
There are different ways companies pay dividends and different types of dividend policies of companies.
Other significant advantage of dividend growth is that over time higher dividends put pressure on stock price to go up.
You learn them and many other aspects of dividend investing on this website. DGP investing system provides valuable knowledge, tools and data for you to succeed in dividend investing.
Inflation is one of the biggest threats for long term investor since it erodes the value of assets. History shows that over long term value of equities grow more than inflation.