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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The shares can still go up in value as the overall company valuation goes up. You can sell your shares for more than you paid, or the company might get acquired and you’d get paid out for your shares. Companies may also start paying dividends in the future once they hit a certain level of growth that’s self sustaining and they don’t need to keep re-investing profits to grow the business.
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