Dividends don't directly affect the valuation of stock investments, as they aren't included in the calculation of most valuation metrics. However, a company's dividend activity or its dividend yield can certainly affect investor sentiment and move the price of the stock, thereby changing its valuation.What is a dividend in a stock market?
A stock dividend is a payout of part of a company's profits in proportion to the number of shares each shareholder owns, paid in the company's own shares rather than in cash. When a company pays a stock dividend the value of each share of stock is not altered, as it is in a stock split.What are common stock dividends?
A common stock dividend is the dividend paid to common stock owners from the profits of the company. Like other dividends, the payout is in the form of either cash or stock. The law may regulate the size of the common stock dividend particularly when the payout is a cash distribution tantamount to a liquidation.