What This Dividend Ratio Is Telling Us Now

Published in Investing on 22 November 2012

Owain and Maynard discuss the 'yield gap'...

Owain Bennallack and Maynard Paton discuss the difference between the dividend yield of the FTSE 100 (UKX) and the current income from government bonds. This 'yield gap' ratio has signalled buying opportunities before, but what does it tell us now? Companies mentioned include BP (LSE: BP), GlaxoSmithKline (LSE: GSK) and Vodafone (LSE: VOD).

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Click below to watch Maynard and Owain's video



> Neither Owain nor Maynard own any of the companies mentioned. The Motley Fool has recommended shares in Vodafone.

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The opinions expressed here are those of the individual writers and are not representative of The Motley Fool. If you spot any comments that are unsuitable hit the flag to alert our moderators.

RichHe6363 22 Nov 2012 , 10:26am

I'm getting a little fed up with all these videos!

Can you at least provide a text transcript when you insist on doing them, I know your trying to be all modern and new media but videos really don't suit the way I access your content at all.

Tarkers 22 Nov 2012 , 10:58am

Same for me. Can we please have a transcript of the discussion ?

apprenticeDRL 22 Nov 2012 , 11:07am

I agree when I am busy I dont have time to watch a video but can easily scim a transcript to extract any interesting information

UncleEbenezer 22 Nov 2012 , 12:01pm

Yep. Stories can be skimmed, but videos take too long to watch, unless it's something *really* interesting. And that's even if the 'net connection is behaving!

How about a flag on those articles that are videos, so we can save the trouble of clicking them when not in a position to watch?

UrbanDreamer 22 Nov 2012 , 2:10pm

Alternatively how about an audio file or podcast. I have yet to see anything illustrated that needs the video feed.

It should be easy to take the video and strip the audio off to provide Fools with this alternative.

The audio file could be played while commuting, you can't watch a video while driving!

alarmbells 22 Nov 2012 , 6:37pm

Anyway comparing dividend yield with bond yield is a screaming irrelevance when BoE owns 30% of government debt.

The "true" 10 yr bond yield would probably be nearer 4% if BoE didn't print money to buy the stuff.

Equity no more than fair value. And given the risks the downside is too much.

FTSE historic yield over 4%, and I'd buy.

giveaholic 23 Nov 2012 , 7:28pm

No more videos. Boo hiss.

ANuvver 25 Nov 2012 , 11:36am


Your point can be taken two ways. Equities may only be fair value, but they're a better deal than anything else out there. Certainly better value than sovereign bonds, for reasons you point out...

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