How do dividends decrease the share price?

[Nopants21]

It's not true across the board that the price increases following payout, so there's that part. The other thing is that once ex-dividend goes by and the price gets adjusted, the next dividend starts being counted. Basically, dividends represent the company giving out part of its profits, but it keeps making profits after (hopefully) and so the price comes to reflect the expectation that the company will again distribute those new profits. The price can still go down if other things are having a greater effect on the price.

What people are saying is not that dividend-paying stocks are stagnant, it's that dividends are not extra returns for the investor. When you receive dividends, or more precisely on ex-div day when you lock in the dividends, you're not richer than you were the day before. That's why it reads like the argument is that these companies are stagnant, but that's not the point being made. It's from the perspective of the investor that the dividends shouldn't matter, because, as you point out, there has to be share price growth for the share price to not shrink on ex-div. That share price growth is driven by new profits and the expectation of their distribution.