While calculating net return, most of us ingore dividend. Since the benchmark considered is also without dividend (Sensex/Nifty or any other index), and dividend yield being generally 1-2% for sensex and most of portfolio, we tend to ignore importance of Dividend. However, since I expect most of us to remain in stock market for 2-3 decades and more (depending on age and ability to digest market volatility and survive), the dividend is real return genetor in portfolio over 20 years+ horizon.
For instance, Sensex (1979=100) with Dividend yield estimated by me from various data on every March end, without Dividend would have been 58,568 as on 31 March 2022. However, if we have assume dividend from Sensex being reinvested, the closing value would have increased to 137,347 as on 31 March 2022.
My calulcation for very long term, almost century for Indian stock market, as on 31-3-1928 are estimated to be 40.98 as on 31-3-1928. (I have applied various periods RBI variable yield securities index and back calculated sensex value from 1979 being 100), increases to 58,568 as on 31 March 2022. However, with assuptions of dividend being reinvested, the Value of portfolio increases to 800,908 with dividend as on 31 March 2022. So ignoring dividend may not see any major impact on 1-2-3-5-10 years horizon. However, as period increases, Dividend contribution to portfolio return is much higher than capital appreciation in my limited understanding.
Some old working on this subject are avialble on this link