Yield. Valuation. Fundamentals.
- Dividend yield provides a meaningful portion of the market’s total return.
- Dividend yield offers concrete evidence of real earnings and provides the most reliable valuation measure.
- The return of cash to shareholders in the form of dividends encourages capital allocation discipline.
The Importance of Dividends
|Price Return (Ex-Dividends)||Total Return||Difference=Dividends*|
|Russell 1000 Value Index (1991)||662%||1465%||55%|
|Russell 2000 Value Index (1994)||582%||1054%||45%|
|MSCI ACWI Ex-US Small Index (2000)||218%||378%||42%|
|MSCI Emerging Markets Index (1988)||1158%||2522%||54%|
Cumulative Performance as of December 31, 2017 since the inception of each index.
*The percentage represents dividends’ contribution to total return.