Total Return Vs Price Change Spreads

As we mentioned in today’s Chart of the Day, there can be a wide spread between total returns and price change based on dividend yield. Although it doesn’t always make financial sense for a company to pay dividends, they can certainly magnify returns all else equal.  

The table below outlines twenty S&P 500 stocks that have seen a high percentage of their returns over the last twenty years come from dividends. The average stock on this list has seen over 80% of their gains over the last two decades come from dividends alone. Although the average stock on this list has only seen a price gain of 61.1% since August of 2002, their average total return when factoring in dividends re-invested has been 278%.

(Click on image to enlarge)

Dividend Stocks

To show you what we mean below is a chart of price change versus total return over the last 20 years for Altria Group (MO). As you can see, the dividend in this case turns a below-average stock into an outperformer. 

Altria Price Chart

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