I understand that a share of stock represents a share of ownership in a company. But if dividends are not paid, what is the actual value of that stock? Why does it have value? The company making more money does not flow to me because I own the stock. So is it basically just like owning a baseball card in that if the player (company) does well more people want to collect (own) their cards (stock) and this the price goes up?
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You essentially buy stocks for two reasons: growth or income.
1. The stock is undervalued and you expect the price to go up (buy low and sell high).
2. The company consistently declares dividends, therefore you earn income from holding the shares.
A third reason some investors buy stock is to gain control or influence, but that is reserved for a few select / large investors
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