First Niagara Financial: The Impact of Dividends on Returns

In my last article, I analyzed the top Small Cap dividend stocks in the Perkins Small Cap Value Fund. While most investors know intuitively that dividends have a significant impact on returns, I found a great example among one of the fund's holdings illustrating this point, which make it worth sharing. First Niagara Financial Corp (FNFG) has raised dividends a total of 45% over the past 5 years. At the same time, its stock price during the past 5 years has shown almost no price appreciation. Note the 5 year chart (click to enlarge), below. A return of approximately 0% without dividends based on the price chart above.So how did the dividends help? In the table below (click to enlarge), note that FNFG provided a return of 14.8% and beat its benchmark by 11.8% over the 5 year time frame! All that return came from the stock's dividends (dividends... Read more

Older articles featuring FNFG: