According to DividendChannel.com, in trading on Tuesday, shares of JPMorgan Chase & Co. (NYSE: JPM) were yielding above the 3% mark based on its quarterly dividend (annualized to $1.00), with the stock changing hands as low as $32.31 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 S&P 500 ETF (SPY) back on 12/31/1998 — you would have paid $123.31 per share. Fast forward to 12/31/2010 and each share was worth $125.75 on that date, a mere $2.44 or 2% increase over all those years. But now consider that you collected a whopping $20.53 per share in dividends over the same period, increasing your return to 18.6%. Even with dividends reinvested, that only amounts to an average annual total return of about 1.4%; so by comparison collecting a yield above 3% would appear considerably attractive if that yield is sustainable. JPMorgan Chase & Co. (NYSE: JPM) is an S&P 500 company, giving it special status as one of the large-cap companies making up the S&P 500 Index.
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 JPMorgan Chase & Co., looking at the history chart for JPM 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 3% annual yield.
JPM operates in the Banking & Savings sector, among companies like Citigroup (NYSE:C), up 2.95%, and KeyCorp (NYSE: KEY) trading up by about 3%.