Total return: price change plus dividends, and reinvesting
Finmind editorial team · · 6 min read
Price return versus total return, how reinvesting dividends compounds over time, a worked example after the 5% dividend tax, and the practical limits on UZSE.
When people say a share "went up 20%", they usually mean its price. For a shareholder, the price is only part of the story. A company can also pay dividends, and over long periods dividends and what you do with them can matter as much as the price. This guide explains the difference between price return and total return, shows what reinvesting dividends does over time, and covers the practical points for investors on the Tashkent Stock Exchange (UZSE).
Price return and total return
Price return is the change in the share's price over a period. If you bought at 10,000 soʻm and the price is now 12,000 soʻm, the price return is 20%.
Total return adds the income you received along the way, mainly dividends. If the same share also paid you 1,000 soʻm per share in dividends during that period, your total return is (12,000 − 10,000 + 1,000) ÷ 10,000 = 30%.
For shares that pay little or no dividend, the two are close. For companies that pay out a large part of their profit, and some UZSE companies do, total return can be much higher than price return. Comparing two shares by price alone can therefore favour the wrong one.
After tax: what you actually receive
Dividends are income, and as of September 2026 resident individuals in Uzbekistan pay 5% tax on dividends under Article 381 of the Tax Code. The tax is usually withheld before the money reaches you. A gross dividend of 1,000 soʻm per share arrives as 950 soʻm. Non-resident individuals pay a different rate, and tax on dividends and bond coupons covers the details.
When you calculate total return, use the dividend you actually received. That is the money you can spend or reinvest.
What reinvesting does
When you receive a dividend, you can spend it, keep it in cash, or use it to buy more shares. If you buy more shares, next year's dividend is paid on a larger number of shares, and so on. This is compounding: returns earning returns.
An illustrative example with invented round numbers, not a forecast for any real share. You invest 1,000,000 soʻm in a share. Each year:
- the price rises 5%;
- the company pays a gross dividend equal to 8% of the current price, which is 7.6% after the 5% tax.
After 10 years:
- Price only. The price has grown by a factor of 1.05 ten times, so your shares are worth about 1,628,900 soʻm. The price return is about 63%.
- Dividends taken as cash. You also received dividends every year, growing with the price, which add up to about 955,900 soʻm. Your total is about 2,584,800 soʻm.
- Dividends reinvested. Each year the net dividend buys more shares at that year's price. Your holding grows by a factor of about 1.05 × 1.076 ≈ 1.1298 a year, and ends at about 3,388,600 soʻm.
Reinvesting turned the same share and the same dividends into about 800,000 soʻm more than taking the cash, over ten years. Over longer periods the gap grows faster, because each year's reinvested dividends start earning their own.
The chart below shows the same idea in its simplest form: 1,000,000 soʻm earning 10% a year for 30 years. The straight line is what you have if you take each year's income out and keep it as cash, the curve what you have if you reinvest it.
Simple and compound interest over 30 years
- Compound interest
- Simple interest
Years
Show the figures
| Years | Simple interest, UZS | Compound interest, UZS |
|---|---|---|
| 0 | 1,000,000 | 1,000,000 |
| 5 | 1,500,000 | 1,610,510 |
| 10 | 2,000,000 | 2,593,742 |
| 15 | 2,500,000 | 4,177,248 |
| 20 | 3,000,000 | 6,727,500 |
| 25 | 3,500,000 | 10,834,706 |
| 30 | 4,000,000 | 17,449,402 |
After 30 years the straight line reaches 4,000,000 soʻm and the curve about 17,450,000 soʻm. The difference is entirely the income on reinvested income. Compound interest explained goes through the arithmetic.
Practical limits on UZSE
Real reinvestment is less smooth than the example:
- Whole shares. You can usually buy only whole shares, so a small dividend may not buy even one. Many investors collect dividends from several holdings and reinvest them together.
- Commissions. Each purchase carries your broker's commission, and some tariffs have a minimum per order. Reinvesting tiny amounts can cost more in fees than it earns. Investment costs explains how to size orders.
- Liquidity. For a thinly traded share, buying more at a fair price may take time. Use limit orders.
- Dividends are not guaranteed. A company can reduce or skip a dividend in a bad year. Check whether it is covered by profit: dividend payout ratio shows how.
- You do not have to reinvest in the same share. Reinvesting dividends into whichever part of your portfolio is below its target helps keep your mix in balance.
When not to reinvest
Reinvesting makes sense when you are building savings for a goal years away. It may not be right when you need the income to live on, when the dividend-paying share already makes up too much of your portfolio, or when you are close to the date you need the money and are moving towards safer assets.
Measuring your own total return
To know how your investments have really done, keep a record of every purchase and sale with its date, price and fees, and every dividend with the net amount received. Your total return is the change in value plus everything you received, minus everything you paid. The free portfolio with a Finmind account shows your holdings and their current values, and the public payout calendar lists upcoming dividend and coupon payments.
Frequently asked questions
Price return counts only the change in the share's price. Total return adds the dividends or other income received over the same period. For shares that pay large dividends, total return can be much higher than price return, so comparing shares by price alone can be misleading.
Not always. Reinvesting helps savings grow when you do not need the income and the goal is years away. If you need the money to live on, if one share already dominates your portfolio, or if your goal is near, spending the dividend or moving it to safer assets may be better.
As of September 2026, dividends paid to resident individuals are taxed at 5% under Article 381 of the Tax Code, and the tax is usually withheld by the paying side before the money reaches you. Use the net amount when you calculate your return.
Because reinvested dividends buy more shares, which then pay their own dividends. Each year the base that earns income is larger. Over a few years the effect is modest, but over decades it can produce several times more than taking the dividends as cash.
This article is for education only and is not investment advice. Investing in securities involves risk, including the loss of money you invest.