From a growth perspective, stocks and bonds are valued properly in relation to one another when the stock yield is sufficiently higher than the bond yield to compensate you for the risk of future earnings shortfalls.
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So study charts of earnings yield (earnings per share divided by stock price) versus dividend yield (dividends divided by stock price).
And an earnings yield a nice way of comparing a stock to a bond yield of more than 10%.
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But the stock even after the recent slide in price the stock has a yield of just 2.4%.
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That gives the stock an annualized yield of 2.5%.
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In combination with a 2% dividend yield, this stock offers a substantial 9% earnings yield that compares well with current bond returns.
Another reason to like dividend stocks is they tend to be less volatile over time because yield provides support: a stock yielding 5% is less likely to get cut in half and yield 10% than a non-dividend paying growth stock or a low-yielding stock.
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You add the dividend yield to your stock price increase to produce a total return that incorporates both the stocks yield and its capital appreciation.
For Japanese investors, this kind of actual or, more correctly, prospective yield from stock ownership may be acceptable.
You know, right now, we do have a little bit more concentration in the preferred stock and high-yield growth.
Another small stock with a big yield is Navios Maritime Partners, a company that owns and operates drybulk carriers.
Gougeon and Amplatz are back on the board, awaiting a public stock offering that should yield a healthy profit for Welsh Carson.
Equity returns before valuation adjustments are a function of earnings growth (which have their root in GDP growth) and dividend yield including stock buybacks.
When you are buying a stock primarily for its yield I suggest that if it rallies 5% or more above your entry level that you use a stop close to break even.
The earnings beat was not enough to shore up interest in the stock, as agricultural yield losses abroad in 2010 have pressured many farmers to switch to crops in high demand this year.
The stock now has a yield of 1.2%.
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The stock has a dividend yield of 4.2%.
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Exelon has a 4.4% yield and its stock price has dropped 14.9% over the past year.
If EPS estimates are cut and the bond yield rises, stock valuations will become less attractive.
The company is a mix growth and income stock because of its dividend yield of over 3.5%.
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Attracted to a stock with a fat dividend yield, but not so sure about the underlying company?
Heinz where its investment is largely in the form of a preferred stock with a 9 percent yield.
Based on the recent price, BCE stock has a projected dividend yield of 5.5% over the next 12 months.
The company also boosted its quarterly dividend to 5.75 cents from 4.25 cents, boosting the yield on the stock to 3.6%.
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Bank of America offered a 0.72% yield while its stock plunged 58%.
In the case of Lockheed, lean valuations and a fat 5.2% yield make the stock look attractive, even with an uncertain future.
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With a target of 8% organic production growth, this is a stock where the bulk of the total return may in fact come from stock gains rather than dividend yield.
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The stock currently provides a dividend yield of 1.4%.
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