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> Nowadays, dividends are double taxed while capital gains are only single taxed, which means that companies mostly don't bother with dividends anymore. Investo

> Nowadays, dividends are double taxed while capital gains are only single taxed, which means that companies mostly don't bother with dividends anymore. Investors tolerate this because the differential tax rates mean that management would be throwing away their money if they issued dividends. Notwithstanding the fact that there are plenty of companies that pay dividends, I assume you're not familiar with REITs, preferred stock and MLPs? Dividend/distribution investing is very much alive and well.

yummyfajitas 13y ago
Dividends these days occur, but they are generally a token rather than the primary means of rewarding shareholders. REITs might work for Hyperloop specifically (depending on whether the IRS believes Hyperloop is an "investment agent specializing in real estate and real estate mortgages"), but they don't work for most companies. The fact that there are a few corporate structures that avoid overtaxing dividends doesn't change the fact that they don't work for most businesses.
- 7Figures2Commas 13y ago
  > Dividends these days occur, but they are generally a token rather than the primary means of rewarding shareholders. I would strongly suggest that you visit a site like http://www.dividendchannel.com/ http://www.dividendchannel.com/. Your statements that "companies mostly don't bother with dividends anymore" and "they are generally a token rather than the primary means of rewarding shareholders" are simply incorrect.
  - yummyfajitas 13y ago
    Since 1980 (the earliest year I could find data for), there has been a drastic decrease dividends. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1979501 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1979501 This paper suggests, though comes far from proving, that dividends do behave as if they are used for signalling (i.e., "look at us, we are healthy, see, dividends").
gaadd33 13y ago
To qualify for the preferential tax treatment of a REIT you have to pay out 90% of their income to shareholders which means that any sort of aggressive growth or risk taking isn't possible. Plus as their name indicates, they aren't exactly useful for general businesses. I don't believe that Apple could switch to a REIT and start paying out huge dividends for example.

yummyfajitas 13y ago

Dividends these days occur, but they are generally a token rather than the primary means of rewarding shareholders. REITs might work for Hyperloop specifically (depending on whether the IRS believes Hyperloop is an "investment agent specializing in real estate and real estate mortgages"), but they don't work for most companies. The fact that there are a few corporate structures that avoid overtaxing dividends doesn't change the fact that they don't work for most businesses.

7Figures2Commas 13y ago
> Dividends these days occur, but they are generally a token rather than the primary means of rewarding shareholders. I would strongly suggest that you visit a site like http://www.dividendchannel.com/ http://www.dividendchannel.com/. Your statements that "companies mostly don't bother with dividends anymore" and "they are generally a token rather than the primary means of rewarding shareholders" are simply incorrect.
- yummyfajitas 13y ago
  Since 1980 (the earliest year I could find data for), there has been a drastic decrease dividends. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1979501 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1979501 This paper suggests, though comes far from proving, that dividends do behave as if they are used for signalling (i.e., "look at us, we are healthy, see, dividends").

gaadd33 13y ago

To qualify for the preferential tax treatment of a REIT you have to pay out 90% of their income to shareholders which means that any sort of aggressive growth or risk taking isn't possible. Plus as their name indicates, they aren't exactly useful for general businesses. I don't believe that Apple could switch to a REIT and start paying out huge dividends for example.