We used the Economatica system to examine the relationship between the 10-year bond yield and the S&P 500 dividend yield currently and over the past few years.
The data we’ve gathered reveals 17 sectors in the S&P 500 have dividend yield higher than the current 10-year bond yield. Highlighting the top 4 sectors – Petroleum and Coal Products Mfg. (4.06%), Clothing and Clothing Accessories Stores (3.66%), Funds, Trusts, and Other Financial Vehicles (3.47%), and Paper Manufacturing (3.04%) are posting dividend yields with spreads ranging from 241 bps to 139 bps over the current yield of the 10-year bond (1.65%).
The other 12 sectors examined in the S&P 500 have a median dividend yield below the 10-year bond yield.
One year ago, at the close of January 2019, the 10-year bond had a yield of 2.64% and only 7 sectors in the S&P 500 posted median dividend yields that were higher at the time.
Please review the table below for more details.
The chart below highlights the different points over the last 9 years in which the yield-gap has inverted.
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