Dividend-News

Focusing On Dividends Alone Remains A Big Mistake

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  Published Tue, 28 Feb 2012 09:58:57 -0500 on Seeking Alpha
  

  
  

  Investors continue to focus on dividends as the best and in some minds the only way to return capital to shareholders. That remains a big mistake as the population of stocks with a high dividend payout ratio, not to mention ones that even pay dividends has been shrinking just about every decade. Several key factors have influenced these decisions. First, the historical tax disadvantage of dividends versus long term capital gains has worked to weaken the focus on dividends. Second, the SEC instituting rule 10b-18 back in 1982 made it easier for firms to implement buybacks without stock manipulation charges. Third, market participants place such a great emphasis on maintaining steadily increasing dividends that corporate boards prefer the flexibility of buyback programs over the negativity of reducing a dividend. Mebane Faber at the World Beta blog posted a great summary of the decline in the dividend payout ratio and the... Read more
  

  Stock name									ISIN	Last trade		P/E	Earnings/Share	Dividend/Share	Dividend yield
  ALTRIA GROUP									US02209S1033	36.92		17.3	2.16	1.76	4.77
  SOUTHERN COMPANY									US8425871071	46.44		19.8	2.35	2.03	4.37
  CONOCOPHILLIPS									US20825C1045	64.31		10.9	5.86	2.64	4.11
  VERIZON COMM									US92343V1044	52.07		132.6	0.40	2.06	3.96
  MERCK & CO									US5893311077	47.33		23.0	1.96	1.72	3.63
  ELI LILLY									US5324571083	55.14		13.2	4.17	1.96	3.55
  NORTHROP GRUMMAN									US6668071029	81.46		10.4	7.88	2.44	3.00
  KOHL'S									US5002551043	52.35		12.1	4.24	1.40	2.67
  TRAVELERS									US89417E1091	83.63		13.0	6.59	2.00	2.39
  GAP									US3647601083	41.67		17.6	2.33	0.60	1.44
  ISHARES DOW JONES SELECT DIVIDEND INDEX FUND									US4642871689
  SPDR S&P DIVIDEND ETF									US78464A7634
  VANGUARD DIVIDEND APPRECIATION ETF									US9219088443

  
  

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