Comments on: Are High-Yield Stocks in Bubble Territory?

By: Joseph B Matheson

Joseph B Matheson — Fri, 07 Dec 2012 22:37:36 +0000

I remember when the tax law changed providing preferential treatment to dividend income, it seemed like many non-dividend paying stocks became dividend paying stocks. That may reverse and make dividend paying stocks scarce and drive up the price of the stocks who continue to pay dividends. (Of course dampened by the loss of preferential tax treatment)

By: bob dal bello

bob dal bello — Tue, 30 Oct 2012 23:32:43 +0000

There is a good reason high yielding stocks are doing well and have been bid up…it”s the zero rate environment we are in! Also research has shown that in the past decades, much of the increased value of equities is from dividends. Also, dividends are a good base for keeping a stock from diving when the market declines.

By: Don Wilber

Don Wilber — Tue, 23 Oct 2012 12:51:12 +0000

I appreciate the insight. Could the percentage of high divdend paying stocks be an anomaly due to the average investor being underweight equtities and they put their toe in with the seemingly safer investment (High dividend payers)? If we are near a bubble in bonds, and equities continue to hold up, wouldn”t the percentage of dividend paying stocks drift downward as they increase their equity holdings? Adding lower yelding equities to the portfolio would cause a drift downward of high dividend stocks. I understand the correlation to HY bonds aspect, but bubble territory? I don”t see euphoria or unrealistic p/e”s yet.

By: David Bize

David Bize — Fri, 19 Oct 2012 15:14:38 +0000

Wont” investors “flocking” to high-yield stocks increase valuations such that the stocks are no longer “high-yield”?