Tweedy Browne recently published a study of high dividend stocks and their out-performance of lower yielding equities. The publication by the managers of Tweedy Browne is compilation of dozens of studies on high dividend yields. I will also be posting this document in my timeless reading section.
Below is Tweedy Browne's elaboration on the publication followed by the link to the PDF.
An Examination of Empirical Data Associating Investment in High Dividend Yield Securities with Attractive Returns Over Long Measurement Periods
In this report, we set forth a number of studies, largely from academia, analyzing the importance of dividends, and the association of high dividend yields with attractive investment returns over long measurement periods. You may be familiar with our prior booklet, What Has Worked In Investing, where we provided an anthology of studies which empirically identified a return advantage for value oriented investment characteristics.
In the same spirit, we attempt to examine what some in our industry have referred to as the "yield effect", i.e. the correlation of high dividend yields to attractive rates of return over long measurement periods. Much has been written about dividends, and what is contained herein is not meant to be an exhaustive analysis, but rather a sampling of studies examining the impact of dividends on investment returns. We hope it will provide you with added insight and confidence, as it did us, in pursuing a yield-oriented investment strategy.
Below is the link to the full study: