When you are searching for stocks to buy, you have the option to look at stocks that have dividends and stocks that do not have dividends. Instinctual, you would want a stock that pays you. However, that is not always the case.
When you buy a stock, you buy it to earn a return. If you buy a stock for $10 and it goes to $11, you made a 10% return. How you get that 10% does not really matter.
If you have a choice between buying a stock for $10 that you think is worth $11 per share or a stock that costs $10 and is worth $10 per share but has a .50 dividend, you should buy the stock that does not pay the dividend because you will have a return 5% higher.
Dividends are great. I get dividends on most of the stocks I own, but I reinvest them in the stock. If it is worth owning, it is worth owning more of. That way, my return goes back into my long term investment.
