Value Investing News

It is a well-documented fact that a significant portion of the historical equity returns are a result of reinvested dividends. In Triumph of the Optimists: 101 Years of Global Investment Returns (2002), the authors looked at equity returns from capital gains and dividends from 1900 to 2000.

Several large companies announced dividend increases over the past week. One of the most notable bullish calls came from the telecom sectors as AT&T (T) showed confidence in its business model by increasing its dividend payment to shareholders for the twenty fifth consecutive years. Despite the tough macroeconomic conditions AT&T (T) is still committed to raising its quarterly dividend.

In Triumph of the Optimists: 101 Years of Global Investment Returns (2002), the authors determined that performance in any given year was driven by capital appreciation, but long-term returns were largely the result of reinvested dividends.