Does the total return include reinvesting dividends (compound interest)?

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I was looking at some charts of high div/yield companies such as REIT's, and often they have terrible stock price growth due to their highly leveraged position eating into their cashflow while depreciation hurting gains on current ratio, making it hard to evaluate their potential and creating sell-offs unless they can retain a higher than normal div/yield.  However, that's expected - bargain bin REIT's and similar vehicles tend to lose worth if they simply don't perform above a standard, despite gross revenue staying steady until they stabilize over time where trailing negative price growth is canceled out by current div/yeild.


What's really perplexing is that looking at the Momentum Tab, the Total Return is atrocious. Take, for example, SNR, whose stock price went from 19.05 on 10/28/2014 to its current price of 5.75 on 2/15/2019 3:18PM, making the return on stock price almost -70%.  There were also $3.84 paid out in dividends per share over that time, which could be re-invested at the increasingly discounted rates or left in escrow.

Holding onto the money would result in only a 49.66% loss, which is a little different than what is shown by the graph.  The graph states -55.16%, so I am thinking perhaps there is a rounding error or lag or something to that degree, but perhaps it did take into account a re-investing strategy.

Which is it?  How does that Total Return graph take into account the dividend?

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Satisfaction mark by anonymous 5 years ago

Thank you. Perfect answer.

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SA Admin Amitai Richman
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Thank you for the question. Our Total Return calculates the dividend re-investments using the Center for Research inSecurity Prices (CRSP) methodology