Stocks v Bonds: DJIA Matchup
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.