If you are looking for dividend stocks, it may seem tempting to look for stocks that have a higher dividend
yield than other stocks.
Not exact matches
The biggest losers were energy (XLE), consumer staples (XLP) and materials (XLB), all down more
than 7 percent amid riding bond
yields — which makes dividend
stock yields less attractive and overrode
other factors, like stronger oil prices and a weak dollar.
-LSB-...] The Most Interesting Asset Class Over the Next Decade «Vanguard highlighted high -
yield bonds to show how they typically perform worse
than other types of bonds during a
stock market drop.»
Vanguard highlighted high -
yield bonds to show how they typically perform worse
than other types of bonds during a
stock market drop.
As usual, I don't place too much emphasis on this sort of forecast, but to the extent that I make any comments at all about the outlook for 2006, the bottom line is this: 1) we can't rule out modest potential for
stock appreciation, which would require the maintenance or expansion of already high price / peak earnings multiples; 2) we also should recognize an uncomfortably large potential for market losses, particularly given that the current bull market has now outlived the median and average bull, yet at higher valuations
than most bulls have achieved, a flat
yield curve with rising interest rate pressures, an extended period of internal divergence as measured by breadth and
other market action, and complacency at best and excessive bullishness at worst, as measured by various sentiment indicators; 3) there is a moderate but still not compelling risk of an oncoming recession, which would become more of a factor if we observe a substantial widening of credit spreads and weakness in the ISM Purchasing Managers Index in the months ahead, and; 4) there remains substantial potential for U.S. dollar weakness coupled with «unexpectedly» persistent inflation pressures, particularly if we do observe economic weakness.
Although decades of history have conclusively proved it is more profitable to be an owner of corporate America (viz.,
stocks), rather
than a lender to it (viz., bonds), there are times when equities are unattractive compared to
other asset classes (think late - 1999 when
stock prices had risen so high the earnings
yields were almost non-existent) or they do not fit with the particular goals or needs of the portfolio owner.
On the
other hand, if the
yield on
stocks rises over your holding period, your actual return will be even less
than the
yield - to - maturity you bargained for.
I don't really worry about
stocks being «overvalued»
other than the reviewing P / E; I think price is reflected in the dividend
yield and I'm investing more for income
than capital gains.
Roughly half of the ETFs have a higher correlation to treasury bonds and the
other half to the S&P 500 Index (i.e., CWB — convertible bonds, JNK — high
yield corporate, PFF — preferred
stock and XLU — utilities all react to interest rates but are more correlated to the
stock market
than to treasury bonds).
On the
other hand, it is the first time in more
than two years that investors can purchase the
stock at a 3.5 % dividend
yield.
If you were to place an equal weight (20 %) into each of these
stocks, you would have a portfolio with a
yield of 4.26 %, better
than any of the
other solutions we've discussed so far.
Municipal bonds can play an important role in an investor's portfolio, offering a higher tax - equivalent
yield than many taxable fixed income alternatives, and the potential for portfolio diversification to
stocks and
other types of bonds.
(If there happens to be fewer
than 75
stocks with
yields above the median,
other rules kick in.)
U.S. preferred
stocks are perceived to be an attractive investment, as they have historically offered higher
yields than other asset classes, especially when the global rates remain low.
European
stocks, on the
other hand, have been delivering an average dividend
yield of more
than 2.5 %, according to MSCI data as of February 27, 2015.
When the share price of a dividend
stock decreases, the
yield increases, so this usually tends to create upward pressure on the
stock and more of a balance
than other stocks.
Lower
yielding stocks than LO to be sure but I too felt the value had topped out and had been wanting to get into some of these
other stocks.
Higher -
yielding stocks tend to offer higher returns over time
than low - or no -
yield stocks, according to research from Jeremy Siegel and
others.
Perhaps this is why many researchers have found that
other measures of value
yield better results
than book - to - market when building value
stock portfolios.
Non-investment-grade bonds (aka junk bonds or high
yield bonds) are more affected by factors
other than interest rates, including some of the same factors (economic booms or recessions) that affect
stocks.
I would also argue that many high
yielding stocks are simply high
yielding since they pay out more of their earnings in dividends and have higher leverage
than the overall market, but their
other underlying characteristics are very market like.
On the
other hand, dividend investors raise strong points: — less fees: even though ETF fees are much smaller
than mutual funds, they do charge more
than holding those
stocks directly — more control: being able to select your type of portfolio, holding
stocks that you believe in and going for the
stocks that you know and targeting the
yield that matches you — more fun?
There are plenty of
other investments to consider in the market that provide much higher
yield (review some of the best high dividend
stocks here) or much faster long - term growth prospects
than Franklin Resources.
On the
other hand, if the
yield on
stocks rises over your holding period, your actual return will be even less
than the
yield - to - maturity you bargained for.
On the
other hand, it is the first time in more
than two years that investors can purchase the
stock at a 3.5 % dividend
yield.
DIS sports much higher dividend growth (as I pointed out in the article and valuation analysis)
than many
other stocks with higher
yields.
You will make more money there — businesses with a high earnings
yield tend to do better
than other stocks, and Facebook does not make it there, for now.
Your points are well made, but I think I can fairly argue that the range of
yields you'll find in a particular property category will still be far narrower
than pretty much any
other property or
stock metric you can think of...
In short, depending on the time span, nearly one - third to one - half of the long - term return on
stocks comes from sources
other than dividend
yield, such as inflation, growth in dividends, and changes in valuation levels.
Stocks have continued on a tear, and corporate credit spreads are very tight, tighter
than any of the
other periods where the
yield curve was shaped as it is now.
«As for common
stocks, they should trade at an earnings or FCF
yield greater
than that of the highest after - tax
yield on debts and
other instruments.»
In
other words, that manager only bought
stocks that had a
yield higher
than a fixed threshold.
Personally I hold 4 main assets, higher
yielding shares, property, gold and bonds but I guess I'm getting off topic a bit so I'll say no more
other than If I could go back in time and advise a young me I'd say get a mortgage as soon as possible but also drip feed money into the
stock market on a regular basis.
MLPs tend to offer higher
yields than REITs or
other dividend
stocks, usually around a range of between 5 % and 7 % a year.