Overview
- Yahoo Finance underscores that dividend-growth portfolios can build generational wealth, urging investors to prioritize firms with steady cash flows, disciplined capital use, and consistent increases.
- Morningstar and Hartford Funds data show dividends contributed about 34% of the S&P 500’s total returns from 1940 to 2024.
- Hartford Funds estimates that reinvested dividends and compounding accounted for roughly 85% of S&P 500 returns between 1960 and 2023.
- The analysis cautions against chasing high yields when fundamentals are weak, noting the heightened risk of dividend cuts and poor stock performance.
- A case study cites Home Depot, where a $10,000 investment in 1990 grew to about $1 million by 2015 with dividends reinvested, illustrating the long-run power of compounding.