Tip of the Day: When the Markets Become Volatile, Remember the Power of Dividend Payments

By: Stacey Nickens

On September 4, 1882, Thomas Edison demonstrated the benefits of electric light to Wall Street bankers, ushering in the age of electricity.  He opened the first central power station in the world at Pearl Street Station in New York City.  At 3 p.m., he flipped a switch at 23 Wall Street, turning on 106 electric lamps in the offices of his financial backer, J.P. Morgan’s investment bank — Drexel, Morgan & Co.  The power station was operated by his Edison Electric Illuminating Company of New York, which still exists today as Consolidated Edison.  In 1885, just three short years after the flip of that switch, Edison’s electric company began paying dividends.

In times of volatile markets, we often overlook the power of dividend payments.  Consider that the S&P 500 Index of large U.S. stocks is up 167% since the beginning of 2010.  However, if you account for the dividends paid out by the stocks in the benchmark and reinvest that cash back into the index, your return jumps to more than 230% over the last 10 years or so!  These 13 dividend stocks share a place in history with Thomas Edison.  They have provided their shareholders dividend payments stretching back at least 100 years.