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 on 12/31/2010 and collect their dividends have received (as of 3/31/2021):
8.2% yield on cost (vs. an original yield of 5.1%) | 63% increase in the amount of dividend income
86% increase in the value of shares | 70% of the original investment paid back as dividend income
|
The Magic of Rising Dividends Over Time
|
The Cumulative Dividend Effect
|
| 10-18-94 |
$8,000 |
|
$900 |
$2,820
|
11.3% |
35.3% |
$44,326 |
554% |
| 12-31-94 |
$8,563 |
$63,500
|
$900 |
$2,820
|
10.5% |
32.9% |
$44,026 |
514% |
| 12-31-95 |
$11,250 |
$63,500
|
$930 |
$2,820
|
8.3% |
25.1% |
$43,114 |
383% |
| 12-31-96 |
$11,938 |
$63,500
|
$945 |
$2,820
|
7.9% |
23.6% |
$42,068 |
352% |
| 12-31-97 |
$12,719 |
$63,500
|
$960 |
$2,820
|
7.5% |
22.2% |
$41,121 |
323% |
| 12-31-98 |
$12,438 |
$63,500
|
$1,020 |
$2,820
|
8.2% |
22.7% |
$40,139 |
323% |
| 12-31-99 |
$10,313 |
$63,500
|
$1,080 |
$2,820
|
10.5% |
27.3% |
$39,096 |
379% |
| 12-31-00 |
$12,438 |
$63,500
|
$1,110 |
$2,820
|
8.9% |
22.7% |
$38,005
|
306% |
| 12-31-01 |
$14,700 |
$63,500
|
$1,140 |
$2,820
|
7.8% |
19.2% |
$36,884
|
251% |
| 12-31-02 |
$17,500 |
$63,500
|
$1,170 |
$2,820
|
6.7% |
16.1% |
$35,733
|
204% |
| 12-31-03 |
$20,000 |
$63,500
|
$1,200 |
$2,820
|
6.0% |
14.1% |
$34,551
|
173% |
| 12-31-04 |
$25,290 |
$63,500
|
$1,320 |
$2,820
|
5.2% |
11.2% |
$33,310
|
132% |
| 12-31-05 |
$21,620 |
$63,500
|
$1,395 |
$2,820
|
6.5% |
13.0% |
$31,964
|
148% |
| 12-31-06 |
$27,700 |
$63,500
|
$1,518 |
$2,820
|
5.5% |
10.2% |
$30,527
|
110% |
| 12-31-07 |
$27,020 |
$63,500
|
$1,641 |
$2,820
|
6.1% |
10.4% |
$28,966 |
107% |
| 12-31-08 |
$23,150 |
$63,500
|
$1,701 |
$2,820
|
7.3% |
12.2% |
$27,304 |
118% |
| 12-31-09 |
$25,910 |
$63,500
|
$1,716 |
$2,820
|
6.6% |
10.9% |
$25,597 |
99% |
| 12-31-10 |
$34,200 |
$63,500
|
$1,731 |
$2,820
|
5.1% |
8.2% |
$23,876 |
70% |
| 12-31-11 |
$34,960 |
$63,500
|
$1,746 |
$2,820
|
5.0% |
8.1% |
$22,139 |
63% |
| 12-31-12 |
$40,210 |
$63,500
|
$1,821 |
$2,820
|
4.5% |
7.0% |
$20,368 |
51% |
| 12-31-13 |
$37,330 |
$63,500
|
$2,186 |
$2,820
|
5.9% |
7.6% |
$18,220 |
49% |
| 12-31-14 |
$47,710 |
$63,500
|
$2,201 |
$2,820
|
4.6% |
5.9% |
$16,028 |
34% |
| 12-31-15 |
$51,630 |
$63,500
|
$2,292 |
$2,820
|
4.4% |
5.5% |
$13,757 |
27% |
| 12-31-16 |
$57,480 |
$63,500
|
$2,430 |
$2,820
|
4.2% |
4.9% |
$11,366 |
20% |
| 12-31-17 |
$57,020 |
$63,500
|
$2,550 |
$2,820
|
4.5% |
4.9% |
$8,839 |
16% |
| 12-31-18 |
$63,040
|
$63,500
|
$2,652 |
$2,820
|
4.2% |
4.5% |
$6,208 |
10% |
| 12-31-19 | $73,630 | $63,500
| $2,730 | $2,820
| 3.7% | 3.8% | $3,498 | 5% |
| 12-31-20 | $62,170 | $63,500
| $2,814 | $2,820
| 4.5% | 4.5% | $704 | 1% |
| 3-31-21 | $63,500 | $63,500 | $2,820 | $2,820 | 4.4% | 4.4% | | |
(1) Current annual dividend income based on annualized dividend per share of $2.82