Dividend vs growth stocks?

AsifM068

Good morning forum, please enlighten me if you can.

How do dividend stocks / funds with their dividends re-invested stack up growth wise when compared to 'conventional' growth stocks / funds say over 5-10 years?

Many thanks

george4064

Why not compare them for yourself? https://www2.trustnet.com/Tools/Charting.aspx

Under ‘Chart Basis’ make sure With Reinvestment is ticked, so you are comparing like-for-like on a total return basis.

Malkytheheed

Growth always outperforms Dividend over time 

AsifM068

george4064 said:

Why not compare them for yourself? https://www2.trustnet.com/Tools/Charting.aspx

Under ‘Chart Basis’ make sure With Reinvestment is ticked, so you are comparing like-for-like on a total return basis.

Great stuff - thank you.

MaxiRobriguez

Malkytheheed said:

Growth always outperforms Dividend over time 

citation required

lozzy1965

In both cases, for individual stocks, it's about picking the winners vs the losers.  If anyone has figured out how to do that please enlighten us all!

dunstonh

There will be periods in the economic cycle where dividend focused stocks would be expected to outperform (that is largely a generic statement as there will be exceptions).  However, there will also be periods where equity income goes off the boil and alternative methods are better.

Thrugelmir

Portfolios should be built to withstand all types of weather. Every system of investing eventually becomes obselete. 

tebbins

Malkytheheed said:

Growth always outperforms Dividend over time 

Except it doesn't. Historically higher yielding companies (dividend/price), and companies with higher dividend payout ratios (dividend/earnings) have been shown to outperform, though of course that's aggregate data and there have been periods like the 90s and post-GFC years when growth did better. For most global markets, most of the total real return over the very long term has been the dividend yield. As an example, since rule 10b-18 was introduced in 1982, the allegedly low-dividend high growth S&P500's combined buybacks + dividends have often exceeded its earnings and the combined yield has often exceeded the famously dividend paying FTSE 100's.

Sources: https://www.google.com/url?sa=t&source=web&rct=j&url=https://www.researchaffiliates.com/documents/FAJ_Jan_Feb_2003_Surprise_Higher_Dividends_Higher_Earnings_Growth.pdf&ved=2ahUKEwi179W09Jz0AhWvhP0HHYhOBEEQFnoECAUQAQ&usg=AOvVaw0BzEOaS7KH5i-kGpzE2Yfe

Credit Suisse Global Returns Yearbook 2020 summary edition p. 27

William Lazonick, the value extracting CEO

Yardeni research S&P500 buybacks

https://press.spglobal.com/2021-06-15-Q1-2021-S-P-500-Buybacks-Double-their-Post-Covid-Low-Companies-repurchased-36-5-more-shares-than-in-Q4-2020

Linton

Malkytheheed said:

Growth always outperforms Dividend over time 

Really. 20 years ago people were saying the opposite - tortoise and hare.

Thrugelmir

Linton said:

Malkytheheed said:

Growth always outperforms Dividend over time 

Really. 20 years ago people were saying the opposite - tortoise and hare.

Woodford became a star for making the right calls and seeing through the hype. A disciple of Buffet.