Don't Obsess About Dividends

With interest rates on bonds, bank CDs, and other low-risk investments at extremely low levels, investors have really taken to the income potential provided by dividend-paying stocks. But a stock that doesn't pay a dividend isn't automatically a loser. In fact, sometimes, a company that chooses to make other uses of its free cash than returning it to shareholders via dividends is making the smartest move it can with its capital. Complaints aplentyA recent MarketWatch article gives a good example of how important dividends have become to investor perception of a stock. The mining industry has enjoyed unprecedented success in recent years, as the prices of commodities have risen through the roof. Not only have precious metals like gold and silver reached all-time or multidecade highs, but base industrial metals such as copper have shot to record prices as well. The share prices of many miners have gone up dramatically as a result.... Read more