Significance Of An Index Dividend Yield Greater Than 10-Year Treasury Bond Yield
Published Oct 7, 2020 on Seeking Alpha

Seeking AlphaToday's Market | Market OutlookSignificance Of An Index Dividend Yield Greater Than 10-Year Treasury Bond YieldOct. 7, 2020 10:20 PM ET|| Includes: BIL, DDM, DFVL, DFVS, DIA, DOG, DTUL, DTUS, DTYL, DXD, EDV, EEH, EGF, EPS, EQL, FEX, FIBR, GBIL, GOVT, GSY, HUSV, IEF, IEI, IVV, IWL, IWM, JHML, JKD, OTPIX, PLW, PSQ, PST, QID, QLD, QQEW, QQQ, QQQE, QQXT, RISE, RSP, RWM, RYARX, RYRSX, SCHO, SCHR, SCHX, SDOW, SDS, SH, SHV, SHY, SPDN, SPLX, SPUU, SPXE, SPXL, SPXN, SPXS, SPXT, SPXU, SPXV, SPY, SQQQ, SRTY, SSO, SYE, TAPR, TBF, TBT, TBX, TLH, TLT, TMF, TMV, TNA, TQQQ, TTT, TWM, TYD, TYO, TZA, UBT, UDOW, UDPIX, UPRO, URTY, UST, UWM, VFINX, VGIT, VGLT, VGSH, VOO, VTWO, VUSTX, VV, ZROZby: David I. Templeton, CFADavid I. Templeton, CFA Registered Investment Advisor, Long Only, bonds, Dividend InvestingHoran Capital Advisors.cls-1{fill:#024999;}SummaryBond market interest rates have been driven down to unforeseen levels, near zero, causing investors to search for yield in other places.
When drilling down into the S&P 500 Index, 337 stocks have a higher yield than the 10-year Treasury yield. In total, this represents almost 90% of the 381 dividend payers in the Index.
In summary, looking for quality dividend-paying stocks in a low interest rate environment can uncover attractive investments.
It probably goes without saying but bond market interest rates have been driven down to unforeseen levels, near zero, causing investors to search for yield in other places. The actions of Central Banks around the world are contributing to this low or no interest rate environment. As the bottom panel in the below chart shows, since the financial crisis in 2008/2009, the spread between the dividend yield on the S&P 500 Index and the 10-year Treasury yield has oscillated between a positive and negative level. Currently, the S&P 500 Index yield is greater than the 10-year U.S. Treasury yield with a spread of 88 basis points.

When drilling down into the S&P 500... Read more