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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It’s considered a financial asset. Theoretically if the company decided to liquidate – or sell itself – you would be paid your share of the assets of the company. If those go up in value, your share could be worth more on paper.
In practice this doesn’t usually happen because most companies have a lot of revolving debt and most people aren’t looking to buy large public companies with cash. I’ve owned a couple that were and yeah, your account is sent a check. This is what happened with Twitter where all the existing owners were paid cash for their shares by Elon Musk.
Otherwise, stock is a valuable financial asset because there’s a market for what people will pay for it, because there’s a market for what people will pay for it. Stock in private companies that’s hard to trade *and* has no say in how the company is run is often devaluated greatly.
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