What Difference Do Dividends Make?

Article
  1. Poor
  2. Satisfactory
  3. Good
  4. Very Good
  5. Excellent

Average: 4.4 (17 ratings)

Financial Analysts Journal
November/December 2016 | Vol. 72 | No. 6 | 13 pages
Source: CFA Institute
C. Mitchell Conover, CFA, CIPM Gerald R. Jensen, CFA Marc W. Simpson, CFA

US$0.00 Member | US$0.00 Candidate | US$0.00 Nonmember

Read

Summary

We evaluate the investment benefits of dividend-paying stocks and identify three major findings. First, high-dividend payers have the least risk yet return over 1.5% more per year than do nondividend payers. Second, the benefit of targeting dividend payers is conditional on investment style. Surprisingly, the benefit is largest for growth and small-cap stocks, the stocks of companies usually thought to benefit the most from reinvesting their cash flows. Third, long–short managers exploiting the value premium should focus on non-dividend-paying stocks as non-dividend-paying small-cap value stocks return 1% more per month than do non-dividend-paying small-cap growth stocks.

View more information

Topics
Credits · About the CE Program
1 CE (including 0 SER) Manage CE Credits

People who viewed this page also viewed:

Article
Are Cash Flows Better Stock Return Predictors Than Profits?
CFA Institute: Financial Analysts Journal
Article
Fundamentals of Efficient Factor Investing
CFA Institute: Financial Analysts Journal
Article
Global Equity Fund Performance: An Attribution Approach
CFA Institute: Financial Analysts Journal

Loading ...