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Does “dividend investing” have value for the South African investor?

Does “dividend investing” have value for the South African investor? A number of portfolio strategies have been proposed, based on the dividend yield of a small number of large companies. It has been suggested that, by following any one of these strategies, a return that is superior to that of the market can be obtained. In this paper, these portfolio strategies are tested for investors on the Johannesburg Stock Exchange. However, not only are strategies based on dividend yield scrutinized, but also comparable strategies based on earnings yield. The average return of various portfolios, selected in accordance with four methods of ranking, are compared. The major finding is that earnings yield is a better ranking method than the dividend yield method. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Meditari Accountancy Research Emerald Publishing

Does “dividend investing” have value for the South African investor?

Meditari Accountancy Research , Volume 8 (1): 19 – Apr 1, 2000

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Publisher
Emerald Publishing
Copyright
Copyright © 2000 MCB UP Ltd. All rights reserved.
ISSN
1022-2529
DOI
10.1108/10222529200000012
Publisher site
See Article on Publisher Site

Abstract

A number of portfolio strategies have been proposed, based on the dividend yield of a small number of large companies. It has been suggested that, by following any one of these strategies, a return that is superior to that of the market can be obtained. In this paper, these portfolio strategies are tested for investors on the Johannesburg Stock Exchange. However, not only are strategies based on dividend yield scrutinized, but also comparable strategies based on earnings yield. The average return of various portfolios, selected in accordance with four methods of ranking, are compared. The major finding is that earnings yield is a better ranking method than the dividend yield method.

Journal

Meditari Accountancy ResearchEmerald Publishing

Published: Apr 1, 2000

Keywords: Dividend yield; Earnings yield; Investment strategies

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