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If you’re into dividend stocks, here’s one to keep on your radar. Mercury General Corp. ($MCY) recently passed a 2% yield based on its quarterly dividend (annualized to $1.27). The stock hit a low of $58.05 on Wednesday, making it an interesting pick for those looking for income-generating investments.
Dividends can play a huge role in a stock’s total return. For example, if you bought shares of the iShares Russell 3000 ETF ($IWV) back in 2000, the stock price barely changed over the next 12 years — a slight 0.6% decrease. But those dividends you earned? A hefty $10.77 per share, boosting your overall return to 13.15%. Even if you reinvested those dividends, you’d still see an average annual return of about 1%. So, a steady 2% yield from Mercury General looks pretty solid, especially if it’s sustainable.
Now, while dividends can be unpredictable, Mercury General’s place in the Russell 3000 means it’s part of a select group of large-cap stocks. Looking at the history of their dividend payments can help you gauge whether that 2% yield is likely to stick around.
For those interested in dividends, MCY could be worth a closer look.