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Stocks: How do stocks with dividends grow compared to stocks without?
Posted by admin on April 9th, 2010
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Part of earnings "growth" is earnings from investments made from earnings. Companies have two choices when it comes to earnings, pay it out as dividends, or reinvest it in existing or new businesses to generate additional income going forward. Companies that pay higher dividends are investing less and therefore figure to be growing slower. Companies that pay lower dividends figure to be investing more, and growing faster. No free lunch here.