Stock dividends account for 52 percent of total S&P 500 return since 1988, compared to 48 percent for stock price appreciation.
So for all the discussion about finding the next great growth stock, long-term investors are even better served by staying with consistent dividend growing companies. This becomes abundantly clear over time, since reinvested dividends produce increased holdings and beget even more dividends. Compare the difference between price-only return and TOTAL return for the S&P 500 since 1988:
The S&P 500 appreciated 610 percent over the 25 year period, whereas a portfolio which reinvested the dividends returned 1,185 percent.
With this in mind, we're searching today for dividend leaders as part of Bloomberg Television's week-long series on companies driving growth in the economy. Specifically, we want companies growing dividends an average of 5 percent per year for the past five years, which also yield at least 3 percent currently.
Only 9... NINE of 1500 companies... made the cut. As we've been saying all week, growth is indeed hard to find.
We share eight additional companies exclusively with blog readers. They nearly made our list, and collectively they're up 38 percent this year, so they're worth a look: Darden Restaurants, Inc. (DRI); Freeport-McMoran Copper & Gold Inc. (FCX); Hasbro, Inc. (HAS); Lockheed Martin Corp (LMT); McDonald's Corp (MCD); Microsoft Corporation (MSFT); Nutrisystem Inc (NTRI); Texas Instruments Incorporated (TXN).