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CONSIDERING DIVIDEND STABILITY IN THE RELATION BETWEEN DIVIDEND YIELDS AND STOCK RETURNS
Journal article   Peer reviewed

CONSIDERING DIVIDEND STABILITY IN THE RELATION BETWEEN DIVIDEND YIELDS AND STOCK RETURNS

Michael J. Gombola and Feng‐Ying Liu
The Journal of financial research, v 16(2), pp 139-150
1993

Abstract

Previous studies show that firms with long records of paying stable dividends are unique. However, research on the relation between dividend yields and stock returns focuses on shorter‐term dividend yield measures without considering long‐term dividend stability. This article shows that high‐yield stocks are not in fact homogeneous, but that stocks with high yields and stable dividends behave differently from stocks with only a high yield. These differences persist even after controlling for firm size, the January effect, and systematic risk, suggesting distinctive risk characteristics for stocks with both high yields and stable dividends.

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Collaboration types
Domestic collaboration
Web of Science research areas
Business, Finance
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