Nathaniel Thiele

I have a question. Do dividends matter? For some investors, yes it does matter. For other investors, no they don’t.

Here are five short reasons why dividends do matter.

1. Dividend-paying companies must be profitable.

If a company is paying a dividend, then there is a high likelihood that the company is profitable.

2. Dividends accounted for 40% of average returns per decade.

Dividends help long-term investors grow their wealth by increasing stock positions by reinvesting dividends.

3. Dividends are essential during times of low returns.

When stocks are down like during the great recession or dotcom bubble dividends can help cover losses.

4. Dividends are mainly paid by mature and stable companies.

Dividends by mature and stable companies allows investors to help grow investments by expotenial levels.

5. Dividends are mainly taxed favorable.

If you have common stock and you hold the stocks for 121 day then the stocks are taxed at a favorable rate.