"Investors love dividend stocks, especially those with high yields, because they provide a substantial income stream and offer significant total return potential. Total return includes interest, capital gains, dividends, and distributions realized over time. In other words, the total return on an investment or a portfolio consists of income and stock appreciation. At 24/7 Wall St., we consistently emphasize the potential of total return to our readers."
"With the prospect of an October rate cut looking very positive, now is the time for investors to buy quality high-yield dividend stocks before the October 28-29 Federal Reserve meeting, where they are likely to announce another 25-basis-point rate cut. Having more passive income can help cover rising costs like mortgages, insurance, taxes, and other expenses, making it easier for investors to save for future needs as they prepare for retirement."
"Since 1926, dividends have contributed approximately 32% of the total return for the S&P 500, while capital appreciation has contributed 68%. Therefore, sustainable dividend income and capital appreciation potential are essential for total return expectations. A study from Hartford Funds, in collaboration with Ned Davis Research, found that dividend stocks delivered an annualized return of 9.18% over the past half-century (1973 to 2023). Over the same timeline, this was more than double the annualized return for non-payers (3.95%)."
High-yield dividend stocks provide substantial income and contribute significantly to total return, which comprises income and stock appreciation. Total return is an effective way to enhance investing success. Expected Federal Reserve rate cuts in late October make now an opportune time to buy quality high-yield dividend stocks before the October 28-29 meeting. Passive income from dividends can help cover rising expenses such as mortgages, insurance, and taxes, and aid retirement savings. Dividends have historically contributed a significant portion of S&P 500 returns, and studies show dividend-paying stocks have outperformed non-payers over multi-decade periods.
Read at 24/7 Wall St.
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