The adage should come to mind whenever you come across a stock that seems extraordinarily low - priced and has
an extraordinarily high dividend yield.
Investors should always be suspicious of companies that pay
extraordinarily high dividend yields like Canadian Oil Sands.
Not exact matches
At times when the
yield spread was less than 80 basis points — when REIT
dividend yields were
extraordinarily high, reflecting REIT stock prices that were especially low relative to current distributions — REIT performance over the next year tended to be especially strong, with total returns that averaged 20.81 percent and outpaced the broad stock market by 5.67 percentage points.
At times when the
yield spread was greater than 180 basis points — that is, when REIT
dividend yields were
extraordinarily low, reflecting REIT stock prices that were especially
high relative to their current distributions — REIT performance over the next year tended to be weak, with total returns that averaged 6.98 percent and underperformed the broad stock market by 1.84 percentage points.