Dividend Yields Look Very Attractive

The total dividend yield on stocks is not too shabby, when we include both cash dividends and net equity issuance.  For non-financial corporations, the yield is around 5.5%.  Including financials, it's a little higher than 4%.  Yields dropped sharply in 2008 and 2009 (when including financials), as equity issuance for financial corporations swelled dramatically.  Overall, yields are higher today than anytime since the 1980s, and that was a time when the competition from yields on fixed income was much stiffer.  Relative to other asset classes, stocks look very attractive historically from this perspective.

Mark Dodson, CFA

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