Dividends have historically made positive contributions to total stock market return, even during periods of higher inflation. As shown below, dividends have produced approximately 40% of the S&P 500©'s total return over time. The remainder has come from price appreciation (the increase in a stock's value). This powerful combination of income and growth may help contribute to the potential for returns.
Chart above displays average annual return by decade 1930s to 2021. Total return consists of a stock's price appreciation plus dividends. During this time, dividends have produced approximately 40% of the total return of the S&P 500.
1930s average total annual return 0.17%, S & P 500 price appreciation -5.26%, S & P 500 dividend return 5.43%
1940s a period of high inflation, average total annual return 8.96%, price appreciation 2.98%, dividend return 5.97%
1950s average total annual return 18.70%, price appreciation 13.58%, dividend return 5.12%
1960s average total annual return 7.67%, price appreciation 4.39%, dividend return 3.28%
1970s a period of high inflation, average total annual return 5.78%, price appreciation 1.60%, dividend return 4.18%
1980s a period of high inflation, average total annual return 17.04%, price appreciation 12.59%, dividend return 4.44%
1990s average total annual return 17.85%, price appreciation 15.31%, dividend return 2.53%
2000s average total annual return -0.90%, price appreciation -2.72%, dividend return 1.82%
2010s average total annual return 13.44%, price appreciation 11.22%, dividend return 2.22%
2020s average total annual return 23.44%, price appreciation 21.46%, dividend return 1.98%”