If a corporation in a stock market is having high income and it has potential fo

Question

If a corporation in a stock market is having high income and it has potential for growth and it’s srock price almost not changing too much but it doesn’t pay dividend for 2 years ? Is it good for investment or no? This inc’s stock is rising today and it is green.And what other factors to consider if investing in this inc. good or no? If a corporation in a stock market is having high income and it has potential for growth and it’s srock price almost not changing too much but it doesn’t pay dividend for 2 years ? Is it good for investment or no? This inc’s stock is rising today and it is green.And what other factors to consider if investing in this inc. good or no?

Explanation / Answer

having high levels of income and still no dividiends clearly points out towards the intent of the management to engage in a very large development be it expansion ie setting up of a new factory/ expanding the existing one. This means that the profits that are earned today are retained and thus would be suggested as a buy as expansion usually is followed by even higher profits and higher returns . the profits will ultimately reach the shareholder sooner or later . As the stock price have not yet increased to its full potential it is the best time to buy the share and hold it  

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