Historical returns from dividend growth stocks suggest potential for 11% annualized gains over four decades.
Dividend-paying stocks in the S&P 500 have delivered a 10.2% average annual total return over the past 50 years. A $100 investment at that rate would grow to over $17,375 in roughly 50 years, according to market data.
To reach $1 million in 40 years, a $15,000 investment would require an 11% annualized return. Several dividend stocks have historically outperformed this benchmark, including Brookfield Infrastructure, Realty Income, and NextEra Energy, which have posted annualized returns of 14.2%, 13.6%, and 13.2%, respectively.
While past performance does not guarantee future results, these companies are positioned to potentially exceed the 11% threshold based on their historical track records.