:

Rising Dividends in 2011 and 2012

>From the NY Times yesterday:
--
Companies listed in the Standard & Poor?s 500-stock index paid $240.6
billion in dividends in 2011, up from $205 billion in 2010. The 2011
 Click to see the full signature
Reply to
Elle
Some commentators claim that companies with higher dividends are so popular now that they have become historically overvalued and could see a quite a share price drop if there is a return to norm. I recall dividend stocks being bitten when adverse taxation proposals are aired. So I wonder if forward p/e ratios or whatever bear this out. Maybe too late to join VIG or the like?
Reply to
dumbstruck
Dunno about the higher dividend (and typically not S&P 500) companies. The P/E ratios at which I am looking (for older, large cap companies with a decent dividend, but not super high dividend) do not particularly bear signs of over-valuation. The S&P P/E is about 12 right now. This is quite low, historically speaking, with the average going back 100+ (Shiller data) years at about 15. Yield is 2%.
Reply to
Elle
Morningstar has an article on their picks of the dividend etfs. They mention my VIG, but say VYM is better. They love HDV, which is based on their own index of excellant stocks in their own right that happen to be dividend heavy. It looks good even tho this chart omits the dividend return:
formatting link
^GSPC
Reply to
dumbstruck
Good report. FWIW, if I were a little more into buying funds lately, I would buy both of these equally. (I have a few funds but way more individual stocks. And at the moment, too much darn cash from CDs coming due and no save haven for it, as many are complaining in unison with me.)
VIG and VYM's P/Es are around 12 and 11, respectively, as a crude metric of the funds. Annual turnover at 15-16% is tolerable for tax purposes.
It is against my religion (part Bogle-ite) to pay an expense ratio more than about 0.20%. HDV's is 0.4%. I know we disagree on this. :-)
Reply to
Elle

BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.