In trading on Wednesday, shares of Alexander’s were yielding above the 8% mark based on its quarterly dividend (annualized to $18), with the stock changing hands as low as $224.25 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 5/31/2012 and each share was worth $77.79 on that date, a loss of $0.48 or 0.6% decrease over twelve years. But now consider that you collected a whopping $10.77 per share in dividends over the same period, increasing your return to 13.15%. Even with dividends reinvested, that only amounts to an average annual total return of about 1.0%; so by comparison collecting a yield above 8% would appear considerably attractive if that yield is sustainable. Alexander’s is a member of the Russell 3000, giving it special status as one of the largest 3000 companies on the U.S. stock markets.
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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 Alexander’s , looking at the history chart for ALX 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 8% annual yield.