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by RC_ITR
1150 days ago
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>So if I don't get dividends, can't vote, and am not entitled to a share of the company's assets, what is the actual value in owning stock? Do I just wait for the share price to go up, sell at the peak, and pass my shares on to the greater fool? That's starting to smell a lot like the worst sort of crypto trading. If they aren't paying dividends (but are profitable), then profits are either going to the balance sheet or into capital and you literally own those things. It's also difficult to grasp, but share buybacks have the same net effect as dividends (they primarily exist for tax efficiency). Oracle is a great example here. They have cut their number of share in half [0] over the past decade, while paying a relatively paltry 1.6% dividend yield. So sure, you're not swimming in cash as an owner, but many investors don't want that, they'll gladly take the effective doubling of their ownership of the balance sheet that they've been given instead. [0]https://www.macrotrends.net/stocks/charts/ORCL/oracle/shares.... |
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