Dividends4Life: Beware These Dividend Growth Stocks With Historically Low Yields

The only way for a stock with growing dividends to offer a high current yield, as compared to its recent historical yield, is for its recent price growth to have lagged its recent dividend growth. If there is no fundamental reason underlying this mismatch between price growth and dividend growth, then such a stock may present the opportunity for outsized return going forward. On the other hand, a stock with growing dividends that offers a low current yield, as compared to its recent historical yield, is one whose recent price growth has outstripped its recent dividend growth. Such stocks are frequently overvalued and may stagnate or decline in price going forward.

This article is meant to be a companion to the article linked above. In this article I present the Challengers, Contenders, and Champions having a historically-low current yield, where historically-low is defined as at least one standard deviation below average in all three trailing 15-year, 10-year, and 5-year windows for Champions, all three trailing 10-year, 7-year, and 4-year windows for Contenders, and all three 7-year, 5-year, and 3-year windows for Challengers. Unsurprisingly, in today's heated market there are many more dividend growth stocks offering historically low yields than historically high yields.

Source: Seeking Alpha

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