Investors and dividend yields

H. Kent Baker, Adri De Ridder and Jonas Råsbrant

The Quarterly Review of Economics and Finance, 2020, vol. 76, issue C, 386-395

Abstract: This paper examines investor preferences for holding stocks with different dividend yields in a low market interest rate environment. Using a unique dataset reflecting the ultimate stock ownership in publicly traded Swedish firms, we examine if different categories of investors have specific preferences for dividends and the size of the dividend yield. We find that domestic institutional investors, unlike foreign investors, have higher holdings in stocks with a high dividend yield. Using multivariate analysis, we document that stock portfolios with dividend-paying stocks outperform those with non-dividend-paying stocks. After controlling for the size of the dividend yield, we obtain mixed results involving stock performance for dividend-paying stocks and the results indicate no strong difference in the period following cuts in market interest rates.

Keywords: Investors; Dividend; Dividend yields (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:quaeco:v:76:y:2020:i:c:p:386-395

DOI: 10.1016/j.qref.2019.09.004

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