The following chart shows the importance of dividend reinvestment on returns over a period of 101 years:

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Source: Triumph of the Optimists, Elroy Dimson, Paul Marsh and Mike Staunton, Princeton University Press, 2002, p. 145 as referenced in “The High Dividend Yield Return Advantage: An Examination of Empirical Data Associating Investment in High Dividend Yield Securities with Attractive Returns Over Long Measurement Periods.”,Tweedy, Browne Fund Inc. 

From the research report:

“In their book, Triumph of the Optimists: 101 Years of Global Investment Returns Princeton University Press (2002), Elroy Dimson, Paul Marsh, and Mike Staunton examined the respective contributions to returns provided by capital gains and dividends from 1900 to 2000. They discovered that while year-to-year performance was driven by capital appreciation, long-term returns were largely driven by reinvested dividends. In the chart below, they showed the cumulative contribution to return of capital gains and dividends in both the U.S. and the U.K. from 1900 to 2000. Over 101 years, they found that a market-oriented portfolio, which included reinvested dividends, would have generated nearly 85 times the wealth generated by the same portfolio relying solely on capital gains. This wealth accumulation would, of course, have been lower if dividends were not assumed to have been reinvested.”