In finance theory, as long as a company is able to grow at a rate higher than the rate at which you could reinvest your dividends, you prefer not to receive a d

In finance theory, as long as a company is able to grow at a rate higher than the rate at which you could reinvest your dividends, you prefer not to receive a dividend. More simply, the idea is that the money staying in the company will grow more quickly than if it's outside of the company so long as the company is doing well. Like a lot of financial theory, I think this is partly true. However, in my view, one of the side benefits of companies giving dividends is that it acts as a sort of long-term "anchor" to the stock's instrinsic value: the amount the company's stock is actually worth, which is usually wildly different from what it's worth on the stock market. Let's say through careful analysis I find a company I think to be greatly undervalued in the stock market. I buy a bunch of shares. If they don't pay a dividend, I'm just hoping that eventually the market will "notice" the discrepancy and the price will go up, but I bear a lot of risk because the opposite could happen. But, if that company pays dividends, and those dividends continue to grow, I am getting a real return which is not based on the vagaries of the market.