The number of companies offering a higher dividend yield than 10-year Treasury bonds is...


The number of companies offering a higher dividend yield than 10-year Treasury bonds is "mind-boggling," Bespoke writes. As of yesterday, 233 (46%) of S&P 500 stocks boast a higher yield than the 10-year, and more than 60 pay out a yield of more than twice the 10-year.
Comments (2)
  • Tom Au, CFA
    , contributor
    Comments (6879) | Send Message
     
    This was true "only" in the 1930s, that is, times like these.
    15 Sep 2011, 11:01 AM Reply Like
  • Conventional Wisdumb
    , contributor
    Comments (1800) | Send Message
     
    Historically stocks were considered riskier than government bonds (what a quaint notion) and therefore dividends were considered a way of mitigating the risk of holding stocks versus bonds. Consequently the dividend yield was higher than the corresponding long term bond to compensate for the added risk.

     

    The idea that shareholders should be indifferent to dividends versus capital gains is a recent financial construct.

     

    What's unusual (to me at least) is that this relationship has taken so long to reassert itself.
    15 Sep 2011, 11:31 AM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Hub
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs