>>20138134dividends tend to give you exposure to mature, stable, profitable companies.
focusing on dividends is a good way to stay out of trouble and nice for normies because it's easy to implement
HOWEVER, if you want to go deeper into understanding the stonk market you have to realize that dividends are just one way of returning capital to shareholders. If you want to judge how shareholder friendly a company is you need to add up all the ways in which a company can return capital + dilute capital
The real bottom line of a company shareholder policy is
Dividends + Net Share change + Net debt change
As a shareholder all these are forms of a company returning you capital, you don't really care if it's through dividends or buying back stock or paying down debt. It all accrets to you.
Too see why dividends is a flawed and incomplete metric consider a company that pays out 1 billion in dividends in a year, but at the same time takes on 2 billion of debt and sells 2 billion of stock. The total shareholder value is -3 billion.
A good place to start is to only invest in companies that have positive shareholder return in the past year.
