Dividend-paying stocks are all the rage. Last week I cautioned on owning high dividend paying stocks as a substitute for fixed income exposure given that on a risk-adjusted basis, they’re really two separate investments (“Investing Myths: stock dividend investing as a substitute for fixed income”). In another post last week, I reviewed performance numbers over the past year that show, unlike popular opinion, high dividend payers are underperforming stocks with lower dividend payouts (“Dividend stocks: there’s perception, and there’s reality”).
Over the past weekend, Barron’s put out a nice piece on the “Danger of Dividend Stocks”, which focuses on the high valuation of certain high-dividend sectors and stocks. It fits nicely with my other two posts.