Historically dividends make-up about 2/3rds of stock returns. The S&P 500 has a miniscule dividend yield of 1.95%. That’s not saying much for future stock returns. That’s why we continue to pound the pavement for yields twice that. More on dividends in The WSJ:
Ultimately, dividends drive long-term shareholder performance. From 1970 to 2012, the dividend yield accounted for about two-thirds of real stock-market returns in major markets, Credit Suisse notes.
Sometimes the market appears to forget that in its enthusiasm for the latest fad offering the prospect of large price appreciation. But with fixed-income yields so suppressed, high-dividend stocks still are worth a close look.
