Stocks with dividends yielded less returns than stocks without compensation

Non-remunerative securities could generate higher income for Russian investors due to rising prices, according to expert calculations for the period from the beginning of 2023 to the last twenty years.

Investors in dividend stocks between January 2023 and August 2024 received a return of 25.32% annually. Stocks without dividend payments during the same period generated 43.66% annually, according to a study by RANEPA and Alfa Capital Management Company.

Stocks without dividends also showed higher long-term returns. From 2005 to 2024, investors’ total return on non-dividend stocks was 16.77% annually, while dividend-paying stocks returned 13.47% annually.

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For a brief period, from January to August 2024, ex-dividend stocks also outperformed. Despite the overall market decline, they caused investors to lose 10.91% annually and dividend stocks to lose 13.56% annually.

From early 2022 (when the market collapsed following the outbreak of hostilities in Ukraine and the imposition of sanctions) until August 2024, shareholders received an average income of 3.76% per year on dividend-paying securities, while securities without dividends returned 15.87%. % annual.

Experts say that the main reason for the loss of dividend stocks is the presence of a gap – a sharp drop in the price of a stock after the date on which the securities are traded on the last day with the right to pay dividends. .