Welcome to Money for the rest of us. This is a personal finance show on money, how it works, how to invest it, and how to live without worrying about it.

I'm your host David Stein. Today is episode 466. It's title, Does dividend investing still work?

Earlier this month, Meta, formerly named Facebook, announced its first quarterly dividend of 50 cents per share.

The dividend will be paid on March 26, 2024 for shareholders a record who owned the stock

as of February 22nd, 2024.

Meta has been a public company since 2012.

It's never previously paid out a portion of its profits as a dividend.

Now it will pay about 9% to 13% of what it earned on a per share basis as a dividend to its shareholders.

The cash used to pay the dividend is cash meta

will not be able to deploy in other ways.

It won't be able to use that cash to invest in future projects and

it can't use the cash to pay down debt or buy back shares of Meta's common stock.

The day after Meta made its dividend announcement,

its common stock jumped 20% to $774 per share.

In theory, when a publicly traded company pays a dividend,

its stock should drop by the amount of the dividend

in the same way that the net acid value of a mutual fund

or E.T.F. falls by the amount of the dividend paid.

If there's less cash that the fund has or the company has on its balance sheet because it paid out the dividend,

then the investment should be worth less.

That's not actually how it works, however.

Companies such as Meta don't initiate a dividend or increase the dividend

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