While dividend-paying stocks and mutual funds are gaining popularity with Microsoft stunning the investment world when it began paying its first dividend in February some financial advisers and investors still prefer companies that reinvest earnings to propel growth, Financial Times reports. Instead of receiving a steady stream of income, they would prefer to see their stocks increase in value.
In spite of these reservations, research over the past 100 years shows that stocks paying dividends have delivered higher returns than stocks that do not.
Still, if investors have reservations about dividend-paying stocks, fund complexes might want to think twice about the prevailing opinion on these instruments before bringing a dividend-paying mutual fund to market.
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.