Why Worry With Dividends? Their Five-Year Reinvested Value for Amphenol
The Power of the Dividend In a world obsessed with price movements of stocks, it''s easy to lose sight of what those prices represent -- the value of holding a company''s future earnings potential. One of the key ways that company earnings find their way into an investor''s pocket is through dividends, which are cash or stock payments that represent a portion of a company''s retained earnings. Retained earnings is found under the shareholder''s equity portion of the balance sheet and represents the amount of earnings a company has left over after paying dividends to its shareholders.Retained earnings is calculated as: RE = BP Net Income - Dividends Where BP = Retained Earnings at the beginning of the period. Before further discussion of why dividends can be impactful in the long-term, here''s a plot showing how much of a difference reinvested dividends would make in one''s five year holdings of NYSE:APH compared to holding the dividends as cash and regular price appreciation. The following plot shows three values over a
Why Worry With Dividends? Their Five-Year Reinvested Value for Amphenol
The Power of the Dividend In a world obsessed with price movements of stocks, it''s easy to lose sight of what those prices represent -- the value of holding a company''s future earnings potential. One of the key ways that company earnings find their way into an investor''s pocket is through dividends, which are cash or stock payments that represent a portion of a company''s retained earnings. Retained earnings is found under the shareholder''s equity portion of the balance sheet and represents the amount of earnings a company has left over after paying dividends to its shareholders.Retained earnings is calculated as: RE = BP Net Income - Dividends Where BP = Retained Earnings at the beginning of the period. Before further discussion of why dividends can be impactful in the long-term, here''s a plot showing how much of a difference reinvested dividends would make in one''s five year holdings of NYSE:APH compared to holding the dividends as cash and regular price appreciation. The following plot shows three values over a