Lancaster Colony Corp Offers Sustainable Dividend Yield Above 2%
On Thursday, shares of Lancaster Colony Corp (Symbol: LANC) delivered a dividend yield surpassing 2%, based on its quarterly payout of $3.8. At one point during trading, the stock was priced as low as $189.55. Dividends are crucial for investors because they have historically contributed a significant portion of the total returns in the stock market.
For example, if you had purchased shares of the iShares Russell 3000 ETF (IWV) on May 31, 2000, at a price of $78.27 per share, you would have experienced a decline by May 31, 2012, with a value of $77.79—an overall loss of $0.48, or a 0.6% decrease over twelve years. However, collecting dividends totaling $10.77 per share during that time would have boosted your total return to 13.15%. Even with dividends reinvested, the average annual total return would only be about 1.0%. In this context, a yield above 2% appears considerably attractive if sustainable. Lancaster Colony Corp is part of the Russell 3000, ranking among the largest companies in the U.S. stock market.
Understanding Dividend Trends and Sustainability
Generally, dividends are not always predictable and tend to fluctuate with each company’s profitability. For Lancaster Colony Corp, consulting the historical dividend chart for LANC below can help assess whether the current dividend is likely to persist. This, in turn, allows investors to form reasonable expectations regarding the sustainability of a 2% annual yield.
Disclaimer: The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
