5 Companies with Stocks that Pay More than Their Bonds

A great strategy for coping in today's rocky market is to buy high-yielding stocks.

For investors, 2008 was notable for many reasons, not least of which was the catastrophic decline in the prices of stocks and almost every other asset class that didn't have the word Treasury in its name. But the year also proved to be a watershed in market history, marking the first time since 1958 that dividend yields on U.S. stocks exceeded the interest rate on ten-year Treasury bonds. Before 1958, stocks had out-yielded Treasuries for as far back as records existed -- a period of at least 75 years.

It may be a while before the trend reverses. As stocks continue to sink and Treasury bonds continue to stage a remarkable rally, the yield disparity widens (as share prices fall, stock yields rise, assuming dividend rates remain constant; fixed-income yields, meanwhile, move in the opposite direction of bond prices). As of September 22, Standard & Poor’s 500-stock index yielded 2.38 %, and the ten-year Treasury yielded 1.72%, for a spread of 0.66 percentage point.

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Jennifer Schonberger
Staff Writer, Kiplinger's Personal Finance