LLooking at the universe of stocks we cover on Dividend Channel, during Thursday’s trading, shares of Hewlett Packard Enterprise Co (ticker: HPE) were losing above the 3% mark based on its quarterly dividend ( annualized at $ 0.48), with the stock moving hands as low as $ 15.95 a day. Dividends are particularly important to consider for investors, as historically dividends have provided a considerable portion of the total return of the stock market. To illustrate, let’s say for example that you bought shares of the S&P 500 ETF (SPY) on 12/31/1999 – you would have paid $ 146.88 per share. Fast forward to 12/31/2012 and each share was worth $ 142.41 on that date, a decrease of $ 4.67 / share over all those years. But now consider that you collected $ 25.98 per share in dividends over the same time period, for a positive total return of 23.36%. Even with dividends reinvested, this only represents an average annual total return of around 1.6%; thus, by comparison, collecting a return greater than 3% would seem considerably attractive if that return is sustainable. Hewlett Packard Enterprise Co (ticker: HPE) is an S&P 500 company, which gives it special status as one of the large cap companies that make up the S&P 500 Index.
In general, dividend amounts are not always predictable and tend to follow the ups and downs in each company’s profitability. In the case of Hewlett Packard Enterprise Co, examining the HPE history chart below can help determine whether the most recent dividend is likely to continue and whether it is reasonable to expect a further. annual return of 3%.
Free report: higher dividends of 7% and more (paid monthly)
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