Income stocks offer value and quality

Average US dividend yields have fallen to roughly 1.2%, their lowest level since the dotcom bubble, says Deutsche Bank. By contrast, the UK’s FTSE 100 pays roughly 3.2%. Traditional finance theory says that people shouldn’t worry about dividends, as “any cash a company pays out reduces its value by an equal amount”, says Spencer Jakab in The Wall Street Journal. Yet US data compiled by Ned Davis Research shows that over the past 50 years dividend payers have historically delivered better annuali...