Paper Title
Do Dividend Paying Stocks Outperform?

Abstract
Do Dividend Paying Stocks outperform? Some investors may prefer stock that pay dividends as dividend payments reduce their initial investment amount or some may invest in stocks that do not distribute dividends but offer higher capital appreciation. Both type of investors shall consider the risk return trade off. In this study, Turkish market was under study and dividend paying stocks underperformed the firms that retain earnings. Returns of BIST Dividend 25 and BIST 30 returns are assessed with inflation rates to detect real returns. 76 % of dividend paying stocks in BIST Dividend Index couldn’t match the inflation rate from year 2016 to 2019. Meanwhile, 46.77% of stocks in BIST 30 are found to have positive real returns. This paper has support for signaling theory and partial support for catering theory but discredits bird in the hand theory. Keywords - Earnings, Dividends, Stock Returns