> dividends are irrelevant when valuing a stock

Aka the Modigliani–Miller theorem.

https://en.wikipedia.org/wiki/Dividend_policy#Modigliani%E2%...

Unless there are dividends, all the factors you mentioned are purely symbolic. The fact that this symbolic -> monetary imputation is now the dominant determinant of stock price was the parent's point.

it's not symbolic - the value of a company (i.e., their share price, if public) can be exchanged with money by selling the share. This is true regardless of the actual dividend payouts. Irrelevancy of dividends is not the same as not _being able_ to pay dividends.

Paying dividends is just one way a company returns profits - but there are plenty of other ways, such as share buy backs, or reinvestments in the company (thus making future returns higher).

It's symbolic in the same way that value accrued by trading pet rocks or beanie babies is symbolic -- the fact that someone will pay money, at some particular point in time, for the asset is irrelevant. It is not generative of money returns on its own.

Dividends, like rents generated by real estate, accrue based on the financial performance of the underlying asset. Dividend payout is the only way valuation has any real basis in financial performance of the underlying business.

No dividend = something else is afoot. Most stocks right now are baseball cards.

You're missing several points:

1)Possibility of issuing dividends means the valuation can't be too low. If it's too low you can just buy it out and issue dividends next year making bank.

2)The the company may hold assets valuable to other (maybe dividend paying) entities. If the valuation is too low they will just buy it out and pay out more dividends.

3)The company may buy its own stock. If the value is too low they will buy a lot of it and issue dividends later at big multiplier.

I am not sure why you're feeling so strongly about that point. It's about the first thing you learn when dealing with equities. If anything paying significant dividends right now means the business is unlikely to grow anymore.

Man, it really doesn't matter if they pay out money or store it in a box. The box still belongs to the company. They can always pay out later or someone else may need a box full of money. Of course it's even better if they do something more useful with the money than just storing it in a box.

They can pay out later, sure. But they needn't pay out anything, ever. They could make a zillion dollars next year and you'd get none, directly. That's the point. Whatever you could get by trading the share is based on somebody's belief in its value, for some definition of "value" (see e.g., Tesla.)

People trade stock as if the companies were yielding something to the stock owners. Many don't. Acting "as if" the company is making those payments -- imputing a price to the stock according to the underlying fundamentals, or some temporally discounted variant -- is a fantasy. It is a symbolic act. An exercise in recursion, anchored in nothing.

The story the market is telling is a very different kind of story, now.

Not symbolic at all. Stock confers legal ownership of a company. Why is ownership of a company's assets any less valuable than ownership of cash dispersed to your personal account?

What’s the difference between dividends and selling a portion of a holding every year?