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 own a claim to all the resources the firm owns – its physical property, its book of business, its brand, its IP, etc. and the firm’s ability to use those resources profitably.
That stuff is valuable and it’s what truly underlies the value of stock, whether or not it pays dividends.
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