A Dividend Offensive
Dividend-paying stocks have regained their strong comparative relative basis relative to the S&P 500 while yielding north of 3.3%, which is well in excess of the 1.6% yield investors are getting from 10-year Treasuries. At the same time, the Dow Jones dividend index is showing less volatility than the S&P 500, with a beta of .78 (approximately 20% less volatile than the S&P 500). In short, dividend-paying names are giving higher yields than Treasuries while providing better price performance and less volatility than the S&P 500.
We are still in a risk-off environment in which traders are avoiding equities, but the money being put to use in equities is flowing toward dividend-producing names. The high relative yield versus government bonds should keep a strong bid under the group in the months ahead....296 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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