You have the phenomenon of a REIT. A special structure which requires payout of the majority of the firm's free cash flow. Growth can then only be financed by taking on new debt or issuing new equity (at least in principle).“Greater Fool” is an annoying moniker to tag onto people who hold non dividend stocks.
My understanding is that dividend paying is done by companies who feel that paying earnings is the best use. The business does not think it can use that money to grow.
Companies that retain earnings generally have a plan for growing their business plan s- so no dividends.
I choose growth over dividends.
Income Trusts function in the same way, broadly.
But, otherwise, as an investor you can choose across the spectrum of companies from high payers (even to the point of unsustainability) to the likes of Berkshire Hathaway (buybacks only) or even companies that are still needing new equity to reach their potential (many Small Cap Growth stocks).
Statistics: Posted by Valuethinker — Tue Jan 07, 2025 12:21 pm