Looking at the universe of stocks we cover at
, in trading on Friday, shares of Archer Daniels Midland Co.
(Symbol: ADM) were yielding above the 2% mark based on its
quarterly dividend (annualized to $0.96), with the stock changing
hands as low as $47.88 on the day. Dividends are particularly
important for investors to consider, because historically speaking
dividends have provided a considerable share of the stock market's
total return. To illustrate, suppose for example you purchased
shares of the S&P 500 ETF (
) back 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 a whopping $25.98 per share in
dividends over the same period, for a positive total return of
23.36%. Even with dividends reinvested, that only amounts to an
average annual total return of about 1.6%; so by comparison
collecting a yield above 2% would appear considerably attractive if
that yield is sustainable. Archer Daniels Midland Co. (Symbol: ADM)
is an S&P 500 company, giving it special status as one of the
large-cap companies making up the S&P 500 Index.
In general, dividend amounts are not always predictable and tend to
follow the ups and downs of profitability at each company. In the
case of Archer Daniels Midland Co., looking at the history chart
for ADM below can help in judging whether the most recent dividend
is likely to continue, and in turn whether it is a reasonable
expectation to expect a 2% annual yield.
According to the ETF Finder at ETF Channel, ADM makes up 8.50% of
the PowerShares Global Agriculture Portfolio ETF (Symbol: PAGG)
which is trading lower by about 0.5% on the day Friday.
Click here to find out which 9 other dividend
stocks just recently went on sale »