If you’re looking for meaningful — and growing — dividend income, take a look at financial services giant Morgan Stanley (NYSE: MS). Its dividend recently yielded a solid 2.5%, and it’s been growing at an impressive clip.
If you invest $1,000 annually in Morgan Stanley stock, you could collect a lot over 20 years.
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Here’s how Morgan Stanley’s dividend has grown over time:
|
Period
|
Average annual dividend growth rate
|
|
Past five years
|
10.44%
|
|
Past 10 years
|
19.12%
|
|
Past 15 years
|
23.25%
|
Data source: Calculations by author using data from Yahoo! Finance.
How much dividend income will you collect over 20 years, buying $1,000 of Morgan Stanley stock annually? Well, it’s hard to say, because:
- We can’t know exactly what the dividend’s growth rate will be over the next 20 years.
- We can’t know the stock’s growth rate over the next 20 years, either.
- As the stock price grows, $1,000 will buy fewer shares.
- Your results will differ significantly depending on whether you reinvest the dividends received into additional shares of stock.
Here’s a different way to approach this question — by looking at the stock’s total returns, which reflect dividends received (but not reinvested):
| Time Period |
Average annual gain
|
|
One year
|
20.05%
|
|
Three years
|
39.47%
|
|
Five years
|
15.31%
|
|
10 years
|
20.21%
|
|
15 years
|
18.33%
|
Data source: Morningstar.com, as of Oct. 21, 2026.
Suppose we estimate that the stock will grow at an average annual rate of 15% over the coming 20 years. If so, investing $1,000 annually will yield a stake worth around $117,800. If the dividend has grown along with the stock price and it still yields 2.5%, the total dividend payment for that 20th year will be around $2,950. So you’ll have gone from collecting $25 in one year to nearly $3,000 by year 20. That’s the power of patience and compounding!
Long-term income-seeking investors may want to take a closer look at Morgan Stanley.
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Selena Maranjian has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
