Dividend Yields vs Stock Price

From Michael Rozeff, a retired professor of finance who posts on the Lew Rockwell blog: “The Dow-Jones Industrials still yield only 3.77% (dividend yield), well below the historic mean. The U.S. is entering a slow-growth environment. Dividend growth will be low or even negative as some firms run into deficits. Yields will therefore have to go higher in order for stocks to provide a decent return for the risk involved. Historically, a 5-6% dividend yield on the Dow is not at all unusual. The year 1982 saw 6% yields. Higher yields than that have occurred. Yields of 5-6% equate to a Dow Industrial Average of 5300-6400, which is substantially lower than its present 8500.” Any thoughts?

How recent is that article? I don’t know the numbers, but I bet (I’ve seen several) a lot of those firms have decreased their dividends, which would bring down the yield. With the free-fall this last week, that 3.77% might be higher now…

I think that is reasonable and one reason to believe it could go much lower. The only thing I am buying besides puts is to add to VERY strong balance sheet companies and some companies paying yields (what I consider safe) usually above 5%. Some exceptions that I am starting to consider, but for me I think it makes sense.

Very silly. Since when is dividend yield the constant?

JoeyDVivre Wrote: ------------------------------------------------------- > Very silly. Since when is dividend yield the > constant? I guess the reason the “Dogs of the Dow” re-balances regularly (annually).