Using U.S. data over the period 1972-2008, we identify a J-shaped relation between dividends and firm value. On average, top-dividend-payers are valued higher than all other firms including nondividend- payers, while non-dividend-payers are valued higher than low-dividend-payers. This Jshaped relation is highly stable over time, given that it is observed in nearly every individual year. Moreover, the J-shaped pattern persists after controlling for key firm characteristics as well as endogeneity. We also find similar J-shaped relations in other stock markets including Australia, Canada, France, Germany, Japan and U.K. Further analyses indicate that existing dividend theories, such as the dividend catering, free-cash-flow and dividend clientele hypotheses, do not offer satisfactory explanations for the J-shaped dividend-value relation.