In periods of low growth, dividends become increasingly important – says Standard Bank, the parent group of Stanbic Bank Ghana. Over a long term investment horizon, dividends and the re-investment of dividends can contribute 90% of the total returns of a portfolio. The value of dividends relative to total returns assumes more significance during periods of low growth – times we seem to be steadily heading into. This is supported by research that shows that over the years companies showed a correlation of 87% between growth in earnings and dividends. “Dividends, therefore, not only rise in line with earnings, but are maintained even when earnings are reduced,” Mr van der Merwe continues.