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The Power of Dividends

Observant1
in Other Investing
Members on another board referenced the following article regarding dividends.
It's a good read...

"Wellington Management began by dividing dividend-paying stocks into quintiles by their level of dividend payouts. The first quintile (i.e., top 20%) consisted of the highest dividend payers, while the fifth quintile (i.e., bottom 20%) consisted of the lowest dividend payers."

"The second-quintile stocks outperformed the S&P 500 Index seven out of the 10 time periods (1930 to 2021), or 77.8% of the time, while first- and third-quintile stocks tied for second, beating the Index 66.7% of the time. Fourth- and fifth-quintile stocks lagged behind by a significant margin."

Comments

  • davfordavfor
    edited May 2022
    Useful reading. Glad to receive the HBLAX reminder at the end of the article...I owned it in the past and will now take a look at it again.
  • yogibearbullyogibearbull
    edited May 2022
    Funds have distributions that include dividends and realized CGs. Stockcharts allows adjusted-prices (similar to growth-of-10K; use TICKER) and actual-prices (use _TICKER) for a dramatic effect on the same chart. As the link (using HBLAX for 10 yrs for example) may default later to 1 yr, I am also including screenshot image.

    HBLAX & _HBLAX https://stockcharts.com/h-perf/ui?s=HBLAX&compare=_HBLAX&id=p86439220899

    image
  • davfordavfor
    edited May 2022
    Keeping with that example, here is M*'s 5 year history of Distributions for HBLAX. It's generally been income and LT capital gains.....

    image

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