Some stocks may experience greater capital growth but pay lower or no dividends, whereas others may experience less capital growth but pay higher dividends. You can determine how well an investment has performed over time by looking at a company's total shareholder return rather than just its share price changes.
On the Australian Securities Exchange, "price indices' only measure price increases and decreases. Look for "total return indices' or "accumulation indices' to calculate both price changes and dividend income.
The benchmark S&P/ASX 200 Index, for example, measures only price changes, whereas the S&P/ASX 200 Total Return Index accounts for both price growth and dividend income, assuming that all dividends are reinvested.
While comparing the total shareholder returns of two different companies can be useful, keep in mind that past performance is not indicative of future performance. A company's performance over a year may not be repeated the following year.