Shareholders in companies that pay little or no cash dividends can potentially reap the benefit of the company's profits when they sell their shareholding, or when a company is wound down and all assets liquidated and distributed amongst shareholders. However, data from professor Jeremy Siegel found stocks that do not pay dividends tend to have worse long-term performance, as a group, than the general stock market and also perform worse than dividend-paying stocks.
Shareholders in companies that pay little or no cash dividends can potentially reap the benefit of the company's profits when they sell their shareholding, or when a company is wound down and all assets liquidated and distributed amongst shareholders. However, data from professor Jeremy Siegel found stocks that do not pay dividends tend to have worse long-term performance, as a group, than the general stock market and also perform worse than dividend-paying stocks.