You are right. I own a really tiny portion of Berkshire shares (BRK.B of course, A is beyond my financial capability at this moment) and they do not pay dividends. You are also correct that they use this money to reinvest elsewhere, which in turn drives company growth.

Dividend payment and retention are two extremes - if you pay all of your earnings and keep none then you have no potential to growth (well, unless you finance elsewhere, which is another story then). It is always about striving a good balance.

But one thing to keep in mind is the cash flow! This cash flow due to dividend is so, so important for many dividend investors! Yes, some good companies are keeping money in their pockets for growth. But don’t forget many of them rely on dividend paying stocks to generate monthly incomes! Think of the retirees, for instance.

It’s just best of both worlds. :)