Write the difference between dividend and growth.
The major differences between dividend and growth are as follows −
- Shorter time horizon (cash inflow is regular).
- Cash flow (stocks) at periodic intervals.
- Release of excess return.
- Tax free (money received).
- Less risk (money will get at regular intervals).
- Outperform growth stocks.
- Less volatile.
- Capital appreciation and cash flows (upside).
- Usually perform even in bear market.
- Investors will look for low market value than intrinsic value.
- Investors will look at dividend yields, pay-out ratio.
- Longer time horizon (cash inflow is end of period).
- Cash flow at redemption/sale only.
- Re-investment of excess return.
- Tax free (money received), only for some schemes of mutual funds.
- Higher returns for investors.
- Underperform than dividends stocks.
- More volatile.
- Only capital appreciation (upside).
- Poorly perform in bear markets.
- Don’t consider intrinsic value, if stock price is rising.
- Will trade high PE ratio.
Published on 25-Sep-2020 13:30:03