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On Monday, shares of Macy’s Inc (NYSE: NYSE:), one of the largest 3000 companies traded on U.S. stock markets and a constituent of the Russell 3000, were traded with a yield exceeding 6%. This figure is based on its quarterly dividend annualized to $0.6616. The stock’s lowest point of the day was $10.73. Dividends have historically played a pivotal role in the total return of the stock market, underlining their significance for investors.
To illustrate this point, consider the example of the iShares Russell 3000 ETF (IWV). If an investor had acquired shares of IWV on May 31, 2000, they would have paid $78.27 per share. By May 31, 2012, each share was valued at $77.79, indicating a loss of $0.48 or a decrease of 0.6% over twelve years. However, during this period, dividends amounted to an impressive $10.77 per share, which increased the return to 13.15%. Even when dividends are reinvested, it only results in an average annual total return of approximately 1.0%. Therefore, a yield above 6%, such as that exhibited by Macy’s on Monday, appears considerably attractive if it can be sustained.
However, it is important to note that dividend amounts are not always consistent and often reflect each company’s profitability fluctuations. By examining Macy’s Inc’s dividend history chart for M, investors can gauge whether the most recent dividend is likely to persist and if it is reasonable to anticipate a 6% annual yield.
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