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| JCI Dividend Yield Pushes Past 2%By Dividend Channel Staff, Monday, August 8, 3:24 PM ET
In trading on Monday, shares of Johnson Controls Inc (NYSE:JCI) were yielding above the 2% mark based on its quarterly dividend (annualized to $0.64), with the stock changing hands as low as $30.28 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 (SPY) back on 12/31/1998 — you would have paid $123.31 per share. Fast forward to 12/31/2010 and each share was worth $125.75 on that date, a mere $2.44 or 2% increase over all those years. But now consider that you collected a whopping $20.53 per share in dividends over the same period, increasing your return to 18.6%. Even with dividends reinvested, that only amounts to an average annual total return of about 1.4%; so by comparison collecting a yield above 2% would appear considerably attractive if that yield is sustainable. Johnson Controls Inc (NYSE:JCI) is an S&P 500 company, giving it special status as one of the large-cap companies making up the S&P 500 Index. Click Here for Special Offers for Dividend Channel Readers
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 Johnson Controls Inc, looking at the history chart for JCI 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, JCI makes up 2.53% of the Cleantech Portfolio ETF (AMEX:PZD) which is trading lower by about 7% on the day Monday. See what other ETFs contain JCI » JCI operates in the Auto Parts sector, among companies like China Automotive Systems Inc (NASDAQ:CAAS) which is down about 7.9% today, and Shiloh Industries, Inc. (NASDAQ:SHLO) trading lower by about 2.1%. Below is a three month price history chart comparing the stock performance of JCI, versus CAAS and SHLO.
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The Importance of Dividends
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