J.C.’s Money Blog

MM from pfblog.com just wrote an article about why he is not a dividend investor.

His arguments are:
Share buy back possibility
Companies can buy back their own shares when they have the cash, instead of giving it out as dividends. This makes the percentage of company ownership a bit higher for every share, making the shares each worth more. This is a great way to maximize shareholder value when the company’s stock is undervalued.

Double taxation of dividends
The company pays taxes on earnings, then you as the investor pay taxes on the dividends. It’s better to just let the money grow without the “frictional losses” of changing ownership of the cash.

Good arguments, MM.