S&P 500 Dividend Yield Drops 100 BPS

Since the March 9th low, the indicated dividend yield of the S&P 500 has dropped from 4.12% to 3.12%. At the same time, the yield on the "risk-free" 10-Year Treasury Note has risen from a low of just over 2% to its current level of 3.15%. The fact that the 10-Year yield is now higher than the dividend yield of the S&P 500 makes equities less attractive.

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On March 9th, 23 stocks in the S&P 500 had indicated dividend yields of more than 10%. Below we highlight these companies and provide their current indicated yields. As shown, most of them have come in significantly.

Comments

[David Van K...:]

I agree with the foregoing comment. As I have stated in previous posts, data on the across-the-board dividend yield of the S&P 500 is interesting, but it is of little relevance to attentive dividend investors who pick the best dividend growth stocks by digging in and doing more research.

Furthermore, stock dividends hold an inherent advantage over bond interest payments: The former grow, the latter don't. For the serious dividend investor who invests in only the best dividend-paying stocks, their yield-on-cost will rise over time as the company increases its dividend year after year. Bonds don't do that. Their yield-on-cost remains the same over the life of the bond. (Excepted are inflation-protected bonds, whose payouts do change over time.)

May 07 10:20 AM

[jculley:]

dividendgrowthinvestor, I have seen you make the same claim of financial indepedence in a number of posts yet you haven't once named a stock you bought/own to reach that goal other then Altria.

When I finally looked through you profile and comment stream, I found out why. You are just on here shilling for a book. The sad part is that you chose that name, since the author Dividend Growth Investor that submits articles and posts here is actually respected for his contributions and research. I believe you have chosen to copycat that name in order to leech off his reputation to try and shill a craptastical book.

Please do the people at SeekingAlpha a favor and either put up your portfolio or go away. Your fortune cookie comments don't offer the readers here anything of value as you attempt to scam unsuspecting new investors.

May 07 11:05 AM

[notsosmart:]

so just another scam among many.

May 07 03:50 PM

[Bangalore19:]

To me this just means the potential capital appreciation of S&P stocks is much greater than that of treasuries which of course in the long term is true.

May 23 11:25 AM

[map:]

No, in the long term companies eventually go bankrupt and their stocks are worth zero. This is less likely, though also possible, for governments. I can't think of a single company that I would expect would probably (greater than 50% chance) of still being as big at it is today 50 years from now. I think the difference between yields of stocks and bonds can be estimated as the GDP growth rate minus the rate difference you'd expect for stocks being riskier, which to me is about zero right now.

May 30 09:36 PM