Llooking at the universe of stocks that we cover in Dividend ChannelIn trading on Tuesday, Blackstone Mortgage Trust Inc (symbol: BXMT) yielded above the 8% mark on a quarterly dividend basis (YoY to $ 2.48), with shares changing hands as low as 30 , $ 76 per day. Dividends are especially important to investors because, historically, dividends have provided a significant share of total stock market returns. To illustrate, let’s say you purchased the iShares Russell 3000 ETF (IWV) stock back on May 31, 2000 – you would have paid $ 78.27 per share. Fast forward to 5/31/2012 and each share was worth $ 77.79 on that date, which means a $ 0.48 or 0.6% loss over twelve years. But now consider that you have received a whopping $ 10.77 per share dividend over the same period, increasing your yield to 13.15%. Even with the reinvestment of dividends, this is only about 1.0% on average per year; Thus, by comparison, achieving returns above 8% may seem very attractive if the returns are sustained. Blackstone Mortgage Trust Inc (symbol: BXMT) is a member of Russell 3000, which gives it special status as one of the 3000 largest companies in the US stock markets.
In general, the size of dividends is not always predictable and tends to match the ups and downs in profitability of each company. In the case of Blackstone Mortgage Trust Inc, viewing the BXMT history chart below can help in assessing whether the most recent dividend payout will continue, and in turn whether it is reasonable to expect an 8% annual return.
The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Nasdaq, Inc.