Why Dividend is important?
As a LONG TERM INVESTOR, I always believed that companies should re-invest dividends and grow rather than paying it out. But yesterday, while watching a YouTube video of Debashis Basu, MoneyLife, I understood why it’s important.
It tells us 3 things:
- Company is profitable.
- Company is paying taxes.
- Company management is paying to outsiders. (No one will issue a paycheck unless it has money in the company)
Last point shows the character of the company rather than anything else.
Originally posted on LinkedIn.
