Darlings of Dividend Investors->NMDC a Block Buster

Dividend companies are dear ones of Income(Dividend) Investor, reason here I was trying to understand how Stock split affects the stock price movement in exchanges and how impedes in net worth of individuals I've extrapolate and taken as NMDC as an example with hypothetical qty, how it would affect your Portfolio on longer run with Splits and Without Splits in stock and why Exits are necessary in fixed interval on a longer horizon is must for investors. 

Highlights :

1. Dividends paying companies are stable in nature but can also have impact if Splits are done on face value
2. Dividend stocks are superb mode for one to build Wealth.
3. Re-investing dividends works with Compounding results
4. Long term need not be lifelong holding as long as no splits or Bonus issued by companies
5. Splits/Bonus are enemies of Net worth. unable to sustain the growth.
6. IT/HITECH Companies aren't only companies creates wealth, infact core industry creates wealth even at higher run rate.

Lets see how it work in our example :  Stock Name : NMDC

• If Stock bought in Jan 2001 qty of 1000 shares with stock price of 1.1INR would have costed you 1100 INR and same year you would have gained dividends of around 2500INR for holding the stock with ROI of 227%. 
• Holding the stock for 9 years your 1100/- would have turned into 8,76,977 on gains Dividend(cumulative Dividend received is around 1,04,527)

Re-investing Dividends & and with splits/Bonus how the stock created wealth over 9years now tell me who will win the debate is it Real estate or NMDC ?  considering this was low risk stock.

• your net worth worth would have been 49 Lakhs straight Cake walk isn't it ?
• Dividend received 6Lakhs
• Qty in your portfolio would be around 9K stocks of NMDC

Further Dissecting if you had held the stock for another 7yrs that is Overall holding period 17 years you would have eroded your gains and Dividend would increase with re-investing. so i would call an exit once stocks faces an Axe by issuing Bonus/Splits. as stock loses the steam and gains PF(portfolio) will be around 9.75Lakhs with Dividend accumulated of 10Lakhs over 17yrs period.

now lets challenge will Real estate wins or Stock market wins ;-)

Disclo : No Holdings, Had small portion of my portfolio in 2014,but position closed due to fall in commodity sector.