Yes it is but a fully franked dividend has at very least the company tax rate paid. So for me, I buy shares with company funds and receive dividends for those shares with 25 cents in the dollar tax paid (which is the Australian taxation rate on companies) and return the dividend back into working capital. Where I get taxed is if the shares that I purchased not only paid a dividend but also went up in value, this is a capital gains tax event but because of my tax write offs within the company its usually mute.
Why not keep it if it's solid you ask. Well there are two types of company, stable with little capital growth (these usually pay big dividends because they are not seeking to grow their business exponentially) and then there are the real wildcat shares. These are hugely explosive, return their capital back into the company for growth rather than pay dividends and go down just as much as they go up. These are the best to trade because you can collect 20/30/40/50% returns in a week regardless of market direction.
