How to Profit from the Next Bull Market by Alan Dustin

Author:Alan Dustin
Language: eng
Format: epub
Publisher: Dundurn Press
Published: 2017-02-04T05:00:00+00:00

FIGURE 7.1

S&P Dividend Yield

Source: Robert J. Schiller, Irrational Exuberance

In the last generation, you can see that the S&P dividend yield spiked in 1991, 2003, and again in 2009. Those were all great entry points to buy equities. Currently, the yield on the S&P 500 is at 2.11 percent. This extremely low dividend yield is another indication that the market is overvalued.

I am compelled to discuss another matter regarding dividends. Lately, Bay and Wall Street experts have been touting the benefits of owning a company’s higher-yielding common shares over their respective bonds because of the paltry coupons. Their rationale for this flawed recommendation is that the dividend yield on many familiar stocks is 1 percent higher than on their debt, on a pre-tax basis. Listed below are the ten highest yielding stocks on the Dow and their projected dividend payout ratios.

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