Total return counts everything a stock gave you: the change in its price PLUS the dividends it paid along the way. Price return counts only the first part — which is why a chart of a stock price can show a flat decade while its holders quietly made money.
When a company pays a dividend, the cash leaves the company and arrives in your account — and the share price typically drops by roughly the dividend amount on the ex-dividend date. Nothing was lost; the value simply moved from one pocket to another. But a price chart only sees the drop. So for any dividend-paying stock, the price line systematically understates what a holder actually earned, and the gap widens every year the dividend is paid.
Example (illustrative): you buy a share at $100. A year later it trades at $103, and it paid $3 of dividends during the year. The price return is 3% — but the total return is ($103 − $100 + $3) / $100 = 6%. You doubled your apparent gain simply by counting the cash you were actually handed. Over long periods this compounds: a stock with a steady 3% dividend yield hands you an extra ~3% a year that never appears on the price chart at all.
The moment you compare two investments, you have to compare like with like. A mature, high-dividend utility and a zero-dividend growth company cannot be judged on price charts alone — that comparison is rigged against the utility before it starts. The same applies to index comparisons: the S&P 500 has a well-known price index and a less-quoted total-return index, and the two tell noticeably different stories over decades. Summarise a multi-year total return as a CAGR if you want a single comparable annual number.
Total return is a pure "how much did I end up with" number. It is silent on risk: a 20% total return earned through a terrifying 50% drawdown counts the same as a 20% earned in a straight line, so always read it beside a max drawdown or a Sharpe ratio. It also usually assumes dividends were reinvested instantly and tax-free, which is an idealisation — your real, after-tax return will be lower. None of this is investment advice.
Price return counts only the change in share price. Total return adds the dividends received. For a non-dividend-paying stock the two are identical; for a high-yield stock they diverge a lot over time.
Usually not. Most default price charts show price return only, so they understate what a dividend-paying stock actually returned. Some tools offer an "adjusted close" or total-return view that folds dividends back in.
To match the quoted figure, yes — most published total-return numbers assume every dividend was reinvested immediately. If you spent the dividends instead, you still earned them, but you gave up the compounding on top.
Browse all S&P 500 tickers to see this metric applied to individual companies.
Educational research only — not investment advice.