The Power of Dow Dividends Dividends get very little respect these days, and no wonder.
Capital gains are sexier, and get better tax treatment to boot.
But over the long haul, it's a different story. Throw in the gains from reinvesting the dividends, and you are talking about roughly half of investors' total returns. Some investors have devised strategies for investing in the 30 stocks that make up the industrial average, using dividends as their guide. The best-known strategy is to buy, at the beginning of each year, the 10 Dow industrial stocks with the highest dividend yields. The yield is simply the dividend divided by the stock price.