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Is there any way to square these divergent explanations of the low dividend yield?
However, the relatively low dividend payout ratio suggests management would prefer to potentially make acquisitions than return cash to shareholders.
This suggests that for larger-cap, dividend-paying blue chips, a low dividend yield may not be bearish.
In a 2012 study, Wayne Pfau examined time periods of low dividend rates and high market valuations on withdrawal rates.
Secondly, various studies have shown that high intitial valuations (cyclically-adjusted p/e, Q ratio, or a low dividend yield) lead to lower returns.
And pension funds, facing growing payouts from Japan's aging population, are starting to reject low dividend proposals and poorly performing managers.
Similar(23)
Because he believes Congress will be inclined to keep taxes relatively low, dividend-paying stocks should benefit, he says.
That is because markets assign a high price-earnings ratio (and low dividend-yield) to countries and companies where future growth is expected to be strong.
American companies have been paying out historically low dividends for years.
Toyota pays relatively low dividends and hoards cash, which smacks of inefficiency.
Therefore, the argument goes, record low dividends simply reflect a shift in how corporations distribute their earnings -- hardly a bearish development.
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