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 Featured MNV Articles:
| Hewlett-Packard Co (HPQ) Shares Cross 3% Yield MarkBy Dividend Channel Staff, Thursday, August 2, 3:13 PM ET
In trading on Thursday, shares of Hewlett-Packard Co (NYSE:HPQ) were yielding above the 3% mark based on its quarterly dividend (annualized to $0.528), with the stock changing hands as low as $17.43 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 12/31/2011 and each share was worth $125.50 on that date, a mere $2.19 or 1.8% increase over all those years. But now consider that you collected a whopping $23.90 per share in dividends over the same period, increasing your return to 21.15%. Even with dividends reinvested, that only amounts to an average annual total return of about 1.7%; so by comparison collecting a yield above 3% would appear considerably attractive if that yield is sustainable. Hewlett-Packard Co (NYSE:HPQ) 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 Hewlett-Packard Co, looking at the history chart for HPQ 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 3% annual yield.
Special Offer: Small cap value stocks have outperformed the markets since the end of the recession — see what you've been missing with this free 30 day trial According to the ETF Finder at ETF Channel, HPQ makes up 2.66% of the Lux Nanotech Portfolio ETF (AMEX:PXN) which is trading lower by about 0.3% on the day Thursday. See what other ETFs contain HPQ » Relevant Stock Market Definitions The Importance of Dividends, Exchange Traded Fund Definition, The Importance of ETFs, Dow Jones Industrial Average Definition, Price-To-Earnings Definition
Find the right mix of model portfolios today at PortfolioChannel.com
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The Importance of Dividends
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