5 Decades of Data Confirm Long-Term Dividend Investing Delivers Real Returns
2026-10-11 15:15
•Micah Zimmerman •The Motley Fool
•• •• Axe Cap view
Why Dividend Growth Matters More Than Ever on the JSE
Steady dividend growers prove their resilience over time, a lesson worth heeding in South Africa's volatile markets.
Data from 50 years of U.S. market history shows dividend-growing companies outperform those that don’t pay dividends—not just in returns but in stability during downturns. This rings true for South Africa, where companies like Sanlam and AngloGold Ashanti have managed to sustain and even grow dividends through economic turbulence. Given our market’s commodity exposure and currency swings, firms that can consistently raise dividends demonstrate strong cash flow and solid management. Meanwhile, banks such as Standard Bank and FirstRand still face interest rate uncertainty, making dividend reliability all the more valuable. Keep an eye also on the USD/ZAR rate, as a weaker rand can inflate earnings for export-driven dividend payers like AngloGold. The risk? A sudden shock to commodity prices or an abrupt policy change could force cuts, reminding us that stability isn’t guaranteed. Still, dividend growth remains one of the better markers for local investors seeking quality and resilience long-term, especially when the rand is unpredictable. this is just our opinion and not financial advice
Buy quality JSE dividend growers like Sanlam and AngloGold that have proven their ability to increase payouts over time. Watch the banks for possible dividend caution if interest rates diverge sharply. Stay alert to USD/ZAR moves influencing exporters’ earnings.
- Sanlam
- AngloGold Ashanti
- USD/ZAR
- Commodity price shocks
- South African interest rate policy shifts
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A 50-year analysis of S&P 500 companies shows dividend growers delivered 10.2% annualized returns versus 3.9% for non-payers from 1973-2023. Dividend-growing companies achieved these superior returns with lower volatility and better downside protection during market downturns, demonstrating that consistent dividend increases reflect durable business fundamentals.
Our take is based on reporting first published by The Motley Fool.