Long-Term Yield Contribution to Total Return Worldwide

Low bond yields and the prospect of bond losses as interest rates rise have put much attention on dividend stocks as an alternative source of investment income. How important has dividend income been to total return over the past 10 years? This article looks at yield return versus price return and total return in US Dollars for 36 countries/regions based on the MSCI BARRA indexes. As one might expect, when total return is low or negative, dividend yield is more important than when total return is high. A corollary to that is that when the stock markets languish or decline, high quality dividend stocks as a group generally tend to outperform (they go down with markets, but generally not so far or for so long), and when the stocks markets boom, high quality dividend stocks as a group generally tend to lag (still positive, but lagging).... Read more