What Difference Do Dividends Make?

Actually quite a bit...

​Research by C. Mitchell Conover, CFA, CIPM, Gerald R. Jensen, CFA, and Marc W. Simpson, CFA shows the investment benefits of dividend-paying stocks and identify three major findings.

• First, high-dividend payers have the least risk yet return over 1.5% more per year than do non-dividend payers.
• Second, the benefit of targeting dividend payers is conditional on investment style. Surprisingly, the benefit is largest for growth and small-cap stocks, the stocks of companies usually thought to benefit the most from reinvesting their cash flows.
• Third, long–short managers exploiting the value premium should focus on non-dividend-paying stocks as non-dividend-paying small-cap value stocks return 1% more per month than do non-dividend-paying small-cap growth stocks.

Entire research paper is available below.​

What Difference do Dividends Make?
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