By way of comparison, using an average of 2.5 hours / day (which is not out of line with the surveys described above) would
yield a ratio of 1:1.
Analysts arrive at the
dividend yield ratio by dividing the total dividend payments paid per year by the market price of the stock.
To allow for capacity, the constituents are weighted by their risk -
adjusted yield ratio times their float - adjusted market cap, with the maximum weight capped at 10 %.
Historically, the traditional measure of rich or cheap for municipal bonds has been the tax - free yield to U.S.
Treasury yield ratio.
Abelson and Racanelli both agree that 2008 sucked, but Santoli puts forth an interesting hypothesis that there are so many factors now favoring this market rallying (
historic yield ratios, seasonality etc.), that it would be really scary if it couldn't.
But at the same time, steep price declines have
pushed yield ratios of municipals to Treasuries to the highest levels ever recorded at every point of the yield curve.
The dislocations that have occurred this year have completely transformed the
traditional yield ratio between Treasuries and munis.
Circles represent weighted ratio mean estimates, error bars represent 95 % confidence limits for the weighted ratio; triangles represent the median
crop yield ratio for all states included in the analysis.
The claim is computed based on the deficit
in yield ratio to the sum insured.
Yield ratios of municipals to Treasuries for some maturities are higher than 200 % or 300 %.
«I look at only two main ratios when I evaluate stocks: the P / E ratio and
dividend yield ratios,» says Raj.
Comparing them to a 30 - year Treasury bond of 3 % (133 %
yield ratio) and 1.9 % core inflation, their value is evident.
You can invest in industries that typically have high dividend payout and
yield ratios, such as banking and utilities, or use to find companies with high dividend payment rates.
Others include the price / cash ratio, dividend
yield ratio, market value per share, and the market / book ratio.
Ex-Fed Chairman Greenspan's favorite way of measuring relative valuation between Stocks and Bond is the Earnings - Yield to Bond -
Yield ratio.
The yield ratios of municipals to Treasuries, as well as the widening of credit quality spreads would have been unimaginable even a couple of months ago.
If you evaluate municipal bonds by the traditional criterion,
the yield ratio of municipal bonds to Treasuries of the same maturity, munis are incredibly cheap: All along the yield curve, munis yield, in absolute terms, anywhere between 150 % to even 300 % of Treasuries.
Toward the end of February 2008,
the yield ratio of munis to Treasuries reached 130 %, and that ratio stayed there for a couple of weeks.