Eli5: What value does a share of stock provide if the company doesn’t pay dividends?

Question

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?

In: 76

Answer 1

The price dictates the value of the company.

Dividends almost always come out of share price, so a $100 stock that pays a $2 dividend will go down to $98.

You hope in the future that the value of the company increases and sell it at that higher value. So yes sorta like collectibles.