As far as I understand, the only thing that investor really get from the company’s profit is mainly from dividends. So, all other P/E ratios, fundamental analysis, chart analysis, etc for stock price growth are no better than just looking into a fortune-teller’s crystal ball? Stock prices seems to be almost entirely driven by “market forces” aka what people feel about the company. Whatever those “expert” analysts say seems to be just trying to put meaning into something that really doesn’t actually impact the stock price, not much difference from horoscope? There are many big profitable companies with almost flat stock prices and there are also companies without any real profits but the stock prices skyrockets.
In: Economics
When you have stock in a company, you own a small portion of the company and ultimately all profits belong to the owners. Many companies pay a dividend which is a payment out to owners from their profit each year. Companies that do not pay out a dividend hold onto their cash or reinvest it into growing the business, but will likely find ways to return money to shareholders in the future through other means such as a share buy back.
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