There are potential benefits to investing long-term in a company that regularly increases its dividend. The longer you hold your shares, the higher the yield you will receive on your original investment, assuming dividends increase over time. Additionally, the compounding of reinvested dividends could generate increased investment returns over time.

As an example: Investors who purchased Realty Income shares 10 years ago and collect their dividends have received (as of 12/31/14):

  • 8.7% yield on cost (vs. an original yield of 5.2%)
  • 89% increase in the value of shares
  • 67% increase in the amount of dividend income
  • 68% of the original investment paid back as dividend income
The Magic of Rising Dividends

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Investors who have elected to reinvest their dividends have enjoyed the following returns over time (as of 12/31/14):

Comparison of $100 Invested in Realty Income in 1994 vs. Major Stock Indices

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Past performance is not a reliable indicator of future performance. There is risk that dividends will not always increase, that dividends will not be declared according to past history, or that dividends will be declared at all.