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| Resources Connection Inc (RECN) Passes Through 2% Yield MarkBy Dividend Channel Staff, Tuesday, August 9, 3:33 PM ET
In trading on Tuesday, shares of Resources Connection Inc (NASDAQ:RECN) were yielding above the 2% mark based on its quarterly dividend (annualized to $0.20), with the stock changing hands as low as $9.82 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 iShares Russell 3000 ETF (IWV) back on 5/31/2000 — you would have paid $78.27 per share. Fast forward to 5/31/2011 and each share was worth $80.78 on that date, a mere $2.51 or 3.2% increase over eleven years. But now consider that you collected a whopping $9.69 per share in dividends over the same period, increasing your return to 20.27%. Even with dividends reinvested, that only amounts to an average annual total return of about 1.7%; so by comparison collecting a yield above 2% would appear considerably attractive if that yield is sustainable. Resources Connection Inc (NASDAQ:RECN) is a member of the Russell 3000, giving it special status as one of the largest 3000 companies on the U.S. stock markets.
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 Resources Connection Inc, looking at the history chart for RECN 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.
RECN operates in the Business Services & Equipment sector, among companies like FleetCor Technologies Inc (NYSE:FLT) which is up about 2.7% today, and Ritchie Bros. Auctioneers, Inc. (NYSE:RBA) trading up by about 1.4%. Below is a three month price history chart comparing the stock performance of RECN, versus FLT and RBA.
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The Importance of Dividends
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