In a deflationary world, investors are looking for capital preservation. Fixed income from government bonds seems to offer that. When it comes to stocks, dividends can be cut, and, of course, share prices can go down, if profits are hammered by a weak economy.
But one interesting wrinkle is the number of companies whose own dividend yield significantly outpaces the yield on their own five-year bonds.
Adrian Cattley at Citigroup has identified 37 European companies in which dividends are greater than their five-year-bond yields, screening out those with a dividend cover, a measure of a firm's ability to pay its dividend, of less than 1.4 times. There are another 29 stocks in the U.S. that show the same pattern and have a dividend cover of at least 1.2 times. The higher the dividend cover, the greater the possibility of earning the dividend.
In molti casi si tratta di società con un flusso stabile di dividendi da molti anni, in settori che sembrano godere di una certa protezione dalle bizzarrie dei cicli economici (aziende farmaceutiche, utilities, ecc.). In alcuni casi il differenziale tra il dividend yield e i rendimenti delle obbligazioni a 5 anni è considerevole, superando il 2% o addirittura il 3%. Secondo il WSJ
These stocks could offer an opportunity. If investors really believe the companies are as safe, from a credit perspective, as the low bond yields suggest, then they are hardly pricing in a collapse in profits that would mean big cuts to the dividend.
Buying the stocks also comes with the benefit that if the consensus is wrong and some form of economic recovery does again spur inflation, companies have flexibility to raise dividends. Fixed-income instruments are locked at the low rate.