The Magic of Rising Dividends
There are potential benefits from 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 and the greater the impact of the cumulative dividend effect.
The table below tells the story of how our long-term dividend investors have fared because of our ability, historically, to regularly increase the amount of the monthly dividend. This dividend success story is based on investors who collect their cash dividends rather than reinvesting them. Here’s what you can determine using the table below:
- If you purchased 1000 shares in 2003 for $20,000, your shares are now worth $45,350, a 127% increase in your investment value
- Your original annual dividend income in 2003 was $1,200, which has now grown to $2,175, or an increase in your annual dividend income of $975, or 81%
- You originally purchased your shares at a dividend yield of 6.0%. Today, the yield on the original cost of your shares is 10.9%, based on continuous dividend increases. This means that to secure annual income of $2,175, with $20,000 invested, you’d have to find an investment providing a 10.9% yield
- You’ve also received a total of $14,697 in dividends through 12/31/12, which means that you’ve received 73% of your original $20,000 investment dollars back as dividends
Realty Income Yield on Cost Calculator
"Yield on Cost" illustrates the benefits of holding shares of a company that pays increasing dividends. The formula is simple—take the current dividend and divide it by the original price per share of your investment. Determine your current yield on cost with this simple calculator.
Original Share
Purchase Price:
Current Annual Dividend:
$2.175
Current Yield on Cost=
(Realty Income)
LEGAL DISCLAIMER:
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.
| Dividends | |
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Find out how we generate dividends.
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| Investing Risks | |
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One of the risks unique to Realty Income dividends is the fact that dividends are supported by lease revenue.
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