Remember when a company chooses to pay a dividend, it's choosing a set aside, you know,

sometimes a meaningful portion of its excess cash to go out the door to shareholders.

Therefore it can't reinvest that cash in projects that might not work out or might not

generate high returns on capital.

And again, if you study history of companies, the biggest companies of today or won't

be the biggest companies from tomorrow, and that's because a lot of companies really struggle

to invest at high rates return over a long period of time.

I'm Chris Hill, and that's Motley Fool's Senior Analyst Matt Argusinger.

We're going more in-depth on dividends, Matt Joins, Anthony Chavone, and Ricky Mulvey

to continue their conversation about investing in companies that pay some of their profits

to shareholders.

First, let's hit a couple of basics.

I don't think we really hit on this in last week's show, and I think it's worth bringing

up.

Where is talk about dividend stocks?

It's kind of this like stodgy, old thing, but I think there's a really compelling case

that younger investors, people earlier in their investing journey, should really pay attention

to the value of compounding dividends.

Absolutely, Ricky.

I think it's one of those, I don't know, misnomers if that's the correct word, but there's

a sense if you're a younger investor that you shouldn't care about dividend companies.

You've got decades to invest.

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