Dividend Paying Stocks 1928-2010

Institutional investors have known for decades that dividend paying stocks have outperformed non-dividend paying stocks and have done so with less risk. Heartland Advisors recently published a study utilizing a number of highly regarded sources.

They concluded that dividend paying stocks out performed non-dividend paying stocks from 1928 to 2010. Dividing the stocks into quintiles, based on dividend yield, the study showed the fourth highest yielding quintile generated the highest returns; over 2.5% higher annualized return in comparison to the lowest yielding quintile and over 3.2% higher annualized return in comparison to non-dividend paying stocks.

 

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