The Dividend Imperative: How Dividends Can Narrow the Gap between Main Street and Wall Street

Introduction

In early 2011, I published a book—The Strategic Dividend Investor—that argued that investors should focus on dividends if they wanted to enjoy superior returns from their stock portfolios. At the time, the U.S. stock market had been offering investors a dividend yield (annual dividend/stock price) of 2% or less for over a decade, and the dividend payout ratio (dividends/profits) for the S&P 500 Index companies was around 30%. I pointed out that both of these figures were well below what they had been historically and what they ought to be from a financial math perspective. In that light, long-term investors would be well served to return their focus to dividend-paying and dividend-growing equities. Indeed, long-term returns were ...