Over the past five years the stocks in the SPDR S&P Dividend ETF (SDY) have posted average earnings growth of nearly 7%. Meanwhile, the stocks in the SPDR S&P 500 ETF (SPY) had annualized earnings growth of 8.7%. Yet right now you’re paying a higher price for the lower growth rate: The SPDR Dividend ETF’s trailing price earnings multiple of 18.9 is significantly higher than the 17.4 for the SPDR S&P 500 ETF.
And while it makes perfect sense to pay up for a solid blue chip dividend payer, right now the price seems especially high for companies such as Coca-Cola (KO), Colgate-Palmolive (CL), Procter & Gamble (PG) and Walgreens (WAG). That compares to the market trading at about 16.5x and defensive consumer stocks at around 19x. Dividend-payers, says the conventional wisdom, will command a higher valuation as Baby Boomers ease into retirement. But even dividend stocks, no matter how solid, can be too expensive. - See more at: http://ycharts.com/analysis/story/why_dividend_stocks_have_become_dangerous#sthash.lYgOiqzw.dpuf
Source: yCharts
Related Articles:
- 12 Higher Yielding Stocks With A Low Dividend Payout Ratio
- Early Warning Signs of a Dividend Cut
- Income Annuities vs. Dividend Stocks
- 7 Tech Stocks With A History of Growing Their Dividends
- Here's Where To Find Great Dividend Stocks
Why Dividend Stocks Have Become Dangerous
Posted by D4L | Sunday, July 20, 2014 | ArticleLinks | 0 comments »________________________________________________________________
Subscribe to:
Post Comments (Atom)
~
Popular Posts Last 30 Days
-
As a relatively new blogger, the one thing that has stood out in my mind is the number of Canadian bloggers in the areas that I am most inte...
-
Dividends and diversification -- those two things can help you achieve a comfortable retirement when combined with the income you will recei...
-
The best dividend stocks have one thing in common: resiliency. They can continue increasing their dividends even in the harshest economic en...
-
Investors wanting to enjoy steady and consistent income should consider dividend aristocrats. In fact, even in these chaotic times, dividend...
-
A good dividend stock has more than a high yield. Dividends need to be supported by cash flow, and cash flow depends on the long-term streng...
-
When looking for dividend stocks to invest in, it is advisable to choose companies that have strong dividend histories and stable balance sh...
-
Higher dividend yields often imply that the underlying company paying the dividend has a higher risk profile. However, that's not always...
-
It's hard to beat a sustainable, high-yield dividend paired with a beaten-down valuation. The best dividend stocks offer high yields and...
-
When hunting for discounted investments, one excellent starting point is to look for businesses with dividend yields trading above their fiv...
-
Strange but true: seniors fear death less than running out of money in retirement. And unfortunately, even retirees who have built a nest eg...
0 comments
Post a Comment
Post a Comment
Note: Only a member of this blog may post a comment.