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Stocks v Bonds: DJIA Matchup



June 18, 2013 – Comments (2)

Since there wasn't much interesting in the new issue bond market last week, I decided to see how the dividend yields on the DJIA thirty stacked up against the companies' own bond yields.  Twenty-two of the thirty stocks have dividend yields that top 10-year treasury notes and thirteen of them have dividend yields that top their own 8-10 year maturity bond yields.

The recent climb in interest rates makes it a little closer call, but I think there's still a compelling case for dividends over coupons, at least in the blue-chip world.

CAPS extra:  The eight DJIA stocks with div yields>bond yields that I didn't cover in the article are: VZ, MRK, PFE, CSCO, KO, XOM, MSFT, and TRV.

Fool on! Russ

I saw Valyooo's Stock's vs high yield bonds blog and may use that as an article topic if I can think of a good way to narrow the playing field.  Any thoughts on how to attack that or if you think it would be an interesting topic are welcome.


2 Comments – Post Your Own

#1) On June 18, 2013 at 10:30 PM, rd80 (95.68) wrote:

Oops, meant to link to Valyooo's blog entry.

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#2) On June 19, 2013 at 1:49 AM, awallejr (38.34) wrote:

Well I got testy with Valuemoney, but I suspect it was more a "language" issue.  Personally I think stocks will rule over fixed instruments but time will tell.

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