The dividend is not paid to the investor, often it is considered as equivalent to growth option but there is a difference. Let us understand each of the options and see what’s the difference between dividend re-invested option with growth option and which is a better choice for an investor.
Understand all the tax components aka LTCG, tax on dividend and DDT for investing in equities (stocks or equity mutual funds) for the longer-term and then see if growth is a better choice of investment over dividend option or not
The stock should pass my investment checklist and fundamental analysis before getting into these business checklists before I consider it for an investment.
When a mutual fund pays dividends, the net asset value of the fund reduces by the amount of dividend being paid out. So reduces the investment in the market.
When you invest in any mutual fund you are in double mind whether to go for Growth option or Dividend option. See a very simple analysis and understand which one is for you.