| RVDondaPC said: 268.43 X .28 = $75.16/$32.41 = 2.32 (8/08) 270.75 shares. If you reinvested all dividends back into Sony stock you would currently own 270.75 shares of Sony Stock. At a current price of $36.81 that gives you a value of $9,966.31. I believe your method was the simple initial 100 shares at $6.20(the $6.20 is used to keep it consistant with my numbers), Split to 200 shares at the current price of $36.81, which gives you a value of $7,362. Then you added the dividend which comes out to $7.23. We multiply that by the 100 shares to give us $723 and add that to the $7,362 to get $8,085. If that is not how you calculated the performance of the stock, please correct me. If you take my value of $620 initial investment and end with a $9,966.31 value, that is a 1,507% return on investment. If you go by stock prices only the $6.20 price compared to the $36.81 then that is only a 493% return on investment, a 987% if you factor in the stock split. Using what I assume is your method it's only a 1,204% return on investment. Yes Sony does pay a relatively low dividend rate compared to other sectors and the last 10 years or so of dividends has relatively little impact on the ROI but it still adds up over time and they've been doing it long before the 2000's. If Sony had kept their dividend and invested it at the rate of the rest of their capital their stock value would currently be $93.43(6.20 X 1507%). I'm not going to declare which company is bigger or try to argue that Sony is as big as Microsoft or anything or even that Sony is the best stock ever or anything, but when determining the long term success of a company or the long term value to a stock holder it is not fair to use just the stock prices when one company has a long history of paying a dividend and the other company doesn't. It's basically setting up a system to favor one company's strategy to return value to investors over the others. You will get a flawed result. A much quicker result but a flawed result. As for the loss claims. Ok they lost "potential" gains because Sony didn't meet the market average, but that doesn't mean investors lost money. So when money was reinvested into Sony they were still making more of a return by reinvesting the dividends than they would be if the dividends just stood still and went into nothing which your method seemed to be using. |
I did not contend the idea of compound returns but again it doesnt matter because the same rules apply to any stock you would have purchased. In the case of Sony vs MS vs NTDOY vs something like QQQQ, Sony is at the bottom of the list every time and if you take into account compouding returns the gap gets even bigger because all 3 competitors had higher dividend payouts over similar time frames. That is all I am trying to say with that comparison.
From a purely financial perspective, this tells me there is something very wrong with Sony. How can the #1 electronic maker of the last several decades significantly underperform its peers and the entire tech sector? Something is not right and whenever you see numbers like that, the 1st thing that I think of is board of directors, executives, and management. Sony has good products but horrible management which is reinforced by my experience working for SCEA 10 years ago in Mira Mesa.
I dont think that Sony is the worst company on earth, they certainly havent gone not gone out of business, but I think that an educated investor should stay away. They have been slowly, but consistently, decaying every year for the last 10 years despite their previous success with the playstation brand and despite all their inroads to format controls. Can they go out of business? At the current pace, they have about 6-10 quarters to turn things around else they need to start shaving off parts of their company. The 1st thing to go is always the work force followed by one or two divisions.
