the multiple investors are willing to pay for those shares changes over time. In addition, shares can also be re-rated i.e. Many investors then choose to reinvest that dividend back into those shares. The dividend cheque is a direct return of course, and that payout can increase over time as the corporation grows its profits. Those increasing dividend payouts remind us that investors in equities receive a return from many different sources. Ten years ago, that total payout amounted to just $330 billion. According to analysts at S&P Dow Jones, the total dividend payout for all stocks in the benchmark S&P 500 index hit – by Febru$600 billion. It's also very normal for US corporations to pay a dividend. At some point, your potential growth rate slows down and at that point, you need to reward patient investors for providing you with the cash to expand. But Meta’s boss Mark Zuckerberg has realised once essential bit of investment logic. The payout in absolute terms makes it the 31st biggest dividend payer in the S&P 500 and should increase the S&P 500 yield by 0.74%, to 1.4609% from 1.4501% pa.įor many investors, this seemed a surprise at the time – a growth stock paying a dividend? Surely the best thing to do is to keep reinvesting back in the business. That annual dividend will cost the firm $4.4 billion. But those humble dividend cheques matter over the long term, even in North America, the home of the Magnificent Seven.Ī few weeks ago, the social network tech leviathan Meta announced that it would pay its first dividend, at a $0.50 quarterly rate, with a yield of 0.51% (using the closing price on the day). Investors in America have swarmed into growth stocks with rampant earnings growth and fat margins, ignoring boring old dividends. Dividends really do matter over the long term, even in North America
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