On Wednesday, shares of CF Industries Holdings Inc (Symbol: CF) were trading at $99.58, yielding over 2% based on an annualized quarterly dividend of $2. As a member of the S&P 500, CF Industries is in a group of large-cap companies that typically provide a significant portion of total stock market returns through dividends.
Historically, dividends have been instrumental in total returns. For instance, an investment in the S&P 500 ETF (SPY) on 12/31/1999 would have resulted in a decrease in share price by 12 years later, but total returns, including dividends, would yield a 23.36% positive return. This highlights the appeal of a sustainable yield above 2% for dividend-seeking investors.
