Dividends Remain Key for Long-Term Investment Success
Looking at the stocks we cover at Dividend Channel, on Tuesday, shares of Stepan Co. (Symbol: SCL) yielded over 2% based on its quarterly dividend, which is annualized to $1.54. The stock traded as low as $75.96 during the day. Dividends hold particular significance for investors, as they have historically contributed a substantial portion of the stock market’s total return.
For instance, if you had purchased shares of the iShares Russell 3000 ETF (IWV) on 5/31/2000 for $78.27 per share, you would have seen your investment decrease to $77.79 by 5/31/2012, resulting in a loss of $0.48, or a 0.6% dip over twelve years. However, during this same period, you would have collected $10.77 in dividends per share, boosting your total return to 13.15%. Even when dividends are reinvested, that only yields an average annual total return of about 1.0%. Thus, a yield above 2% would undoubtedly appear appealing, assuming it is sustainable. Stepan Co. (Symbol: SCL), a member of the Russell 3000, holds a distinguished position among the largest 3,000 companies in the U.S. stock markets.
Generally, dividend amounts can fluctuate based on company profitability. Examining Stepan Co.’s historical dividend chart below may provide insights into whether the recent dividend is likely to persist and whether a 2% annual yield is a reasonable expectation.
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Additional Insights:
– LFVN Average Annual Return
– Top Ten Hedge Funds Holding COLI
– PCTI Insider Buying
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
