On average the total returns on pure equity stocks is better than pure dividend stocks. If you factor in tax treatment of capital gains vs qualified dividends, pure equity stocks still put more money in your pocket on average.
If reliable cashflow is the priority then dividend stocks have their place but GICs and bonds are more reliable albeit lower total returns on average and tax treatment on interest is usually the worst.
Now might be a good time to get into dividend stocks like BCE and Enbridge as those companies require intense capital investment that is financed through debt and interest rates are falling. You could be collecting that sweet 8.65% BCE dividend and the stock appreciates significantly from the drop in interest rates.
"On average the total returns on pure equity stocks is better than pure dividend stocks. If you factor in tax treatment of capital gains vs qualified dividends, pure equity stocks still put more money in your pocket on average."
Whichever gives the lowest effective tax rate depends on a myriad of factors, such as income level, potential clawbacks, etc. In general, if you're in the higher tax brackets (and everyone appears to be a millionaire on Terb, LOL), capital gains are preferable.
Using an extreme example, billionaires don't want dividends, because it forces them to pay taxes on cash they don't need. When, say, Bezos decides he wants to buy a yacht or travel to space, he'll sell some shares.
Lots of pro-dividend investors use Warren Buffett as a counterargument, but Buffet doesn't base his investment decisions on dividends (he made it clear in Berkshire's 2012 letter to shareholders)--he's a value investor who buys solid, but undervalued (his opinion) stocks. And, he prefers more established, mature companies, which tend to pay dividends. Because he likes low prices, it makes it seem he prefers to buy high-dividend yield stocks, but it's just a coincidence--he cares about total return.
"If reliable cashflow is the priority then dividend stocks have their place..."
Yeah, it's the "bird-in-hand" argument aka uncertainty resolution by dividend investors--another reason dividend investors prefer dividends because they're more predictable than capital gains. But, as you implicitly said, what really matters is total return--that is, how much money you actually end up having.
Looks like so-called "blue-chip" stocks are really popular on Terb, like BCE, Rogers, Big Banks, etc. I'll use BCE as an example since there a popular thread on it on Terb--yeah, the stock has a high dividend yield, but that's because it's been tanking. Over the past FIVE years, it's essentially flat (actually slightly down) on a total return basis, while the TSX is up almost 40 percent (sites like Ycharts can give you the total return, and not just the capital gain/loss return).
Sure, the TSX index fund
mainly doesn't generate explicit cash flows, so you'd have to sell some shares to generate your own cash flow/dividend, but at the end of the day, you have more money in your bank account.
Then to outperform the TSX or whatever market index, then you'd have to construct a portfolio of dividend-paying stocks that outperform (i.e., stock pick). Not saying it's impossible, but the odds are not in one's favour to outperform the market, especially over time (5+ years). And, based on some of the posts here (e.g., people complaining about the stock performance of BCE, TD, etc.; people panic-selling Tesla in late 2022, etc.), I'd venture to say most people here haven't beat the market over 5+ years. If they have, they likely took on additional risk for which they were compensated for. I doubt anybody here who actually outperformed the market strictly on a return basis (not factoring in risk) actually calculated their risk-adjusted return using, say, the Sharpe or Treynor ratio.
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