Cameron Passmore CIM, FMA, FCSI

Portfolio Manager

Benjamin Felix MBA, CFA, CFP

Associate Portfolio Manager
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  • F613.237.5949
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  • Ottawa, Ontario K1S 2E1

Can The Dividend Yield Predict Returns?

December 18, 2012 - 0 comments

“High dividend paying stocks do not reliably earn above-average, risk-adjusted returns” is the catchy first line of a recently released paper.  The percentage of firms that pay a dividend has fallen from 63% in 1972 to 36% in 2011.  But where did the money do?  Share repurchase? Debt repayment?

This paper looks at what can be learned from these decisions that companies make, and whether this information can add value to portfolios.

In this week’s Science of Investing, host Jason McIntyre and Cameron discuss this as well as the Santa Claus dividends leading up to the potential fiscal cliff in the US.

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