TTP - Do Dividend-Paying Stocks Make Better Investments?
Investors mistakenly believe that dividend-paying stocks make better investments. A company paying dividends is thought to have a more concrete valuation and the dividends are beloved by retirees who can visually see the dividends supporting their withdrawals. In other words, dividends are loved because you can take your dividends to the bank and spend them.
The math and science of factor investing are a little more complicated than this simplistic thinking though.
You can calculate a stock's dividend yield by dividing the annual dividend payout by the stock's current price. Dividend stocks are those that