When it comes to stock investments, the allure of dividends should never be underestimated. Patterson Companies Inc (Symbol: PDCO) has recently caught the attention of investors by passing the 4% yield mark. On Wednesday, as trading unfolded, the quarterly dividend of $1.04 pushed the yield up, with shares trading as low as $25.87.
The Importance of Dividends
For seasoned investors, dividends play a crucial role in shaping overall returns. History showcases how dividends have significantly contributed to the total return of the stock market. Take, for instance, the scenario where one invested in the iShares Russell 3000 ETF (IWV) on 5/31/2000, buying in at $78.27 per share. Fast forward to 5/31/2012, and each share stood at $77.79, a nominal drop of $0.48 or a 0.6% decrease over twelve years. However, accounting for the whopping $10.77 per share in dividends collected over the same period ramps up the return to 13.15%. Even with dividends reinvested, the average annual total return barely scrapes past 1.0%. A yield surpassing 4% indeed presents an enticing proposition, provided that yield remains sustainable. Patterson Companies Inc (Symbol: PDCO) enjoys the distinction of being a part of the Russell 3000, signifying its stature as one of the top 3000 companies on U.S. stock markets.
Stability and Sustainability
Granted, dividend amounts aren’t always set in stone; they ebb and flow in harmony with the profitability trajectory of each company. Delving into the historical dividend chart for Patterson Companies Inc can offer valuable insights into the likelihood of ongoing dividend payouts. By assessing this data, investors can gather nuanced clues on the sustainability of the 4% annual yield expectation associated with PDCO.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
