Tuesday, November 18, 2014

What is Better - Growth or Dividends?

For investors, it is important to establish an objective for investing.  Many investors are looking for either income or growth, or a combination of both.

Income investors may look to high yielding stocks that pay a large dividend to receive a steady flow of income annually.  In this case, it is important to find companies that are not in danger of having their dividends reduced or eliminated.  This blog, Undervalued Stock Picks, through its posts can help you find those companies.

Also, growth stocks are the rage because they can produce high annual returns when they do well, such as gains we have seen in stocks in the neighborhood of 20+% annually.  In this case, the returns come from share price appreciation, rather than from the dividend.  Many growth stocks also pay a dividend, with a yield lower than one that would be a slower growing company.

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