The 30-Year Treasury Now Out-Yields Dividend Stocks by 2.2 Points. History Says What Followed the Last Time.
The long bond hasn't yielded this much in 19 years. What happened to dividend payers the last time it did is worth remembering.
Overview
Income investors got a milestone this week. On Tuesday, Aug. 18, the 30-year Treasury yield topped 5.33%, its highest level in 19 years, as worries over inflation and government spending pushed long-term rates higher.
The Schwab U.S. Dividend Equity ETF (NYSEMKT:SCHD), a $109 billion fund holding about 100 dividend-paying stocks, yields about 3.1% at its current share price. That's a gap of about 2.2 percentage points in favor of the bond -- guaranteed, for 30 years, backed by the U.S. government.
Details
A saver hasn't faced a choice framed quite this way since 2007. Treasury data shows the long bond last yielded this much in June of that year, when it peaked at 5.35%.
Source
Originally published at www.fool.com.
Related Articles
- GE Vernova's Backlog Is Bigger Than Some Countries' GDP. Here's What's Actually Inside the $176 Billion.
- Apple Announced Its Largest-Ever Stock Buyback Under Tim Cook's Leadership. Here's Why the Size of the Repurchase Program Matters for Shareholders.
- Up 20% in 1 Day, is Hyperliquid Worth Buying Hand Over Fist Right Now?