The only paper I could find is the following:

Dividend Yield Strategy in the British Stock Market 1994-2007 by Brzeszczynski et al. (2008)

It states that a portfolio of stocks with high dividend yields outperforms the broad market most of the time.

Now of course this is only the UK market within a period of a little more than a decade. So I am looking for more papers on this topic covering more markets and longer periods of time.

  • $\begingroup$ Fama/French has portfolios formed on dividend yields (mba.tuck.dartmouth.edu/pages/faculty/ken.french/…). This could be the starting point for your research. $\endgroup$
    – Helin
    Commented Jul 31, 2016 at 18:04
  • $\begingroup$ Consider that in the US individual investors pay income tax on dividends while university endowments, foundations and pension plans do not. So the answer could get complicated: outperform for which kind of investor? $\endgroup$
    – nbbo2
    Commented Aug 2, 2016 at 19:49
  • $\begingroup$ @noob2: Normally tax considerations are not part of performance measures. $\endgroup$
    – vonjd
    Commented Aug 3, 2016 at 6:22
  • $\begingroup$ there is at least one paper that "proves" that any strategy is the best.. $\endgroup$
    – user123124
    Commented Oct 5, 2021 at 5:05

2 Answers 2


The highly respected CXO Advisory Group has done some research on this topic on basis of a suggestion from me. The result is summarized as follows (cited with permission):

In summary, evidence suggests that high-dividend stock ETFs mostly generate positive alpha with beta less than one relative to SPY, but other performance comparisons to the market are mixed.

After having read the very interesting post I have to say that the case is far from closed but all in all high-dividend stocks don't seem to have a clear edge over the broad market.

The full piece can be found here but most of it is behind a paywall: https://www.cxoadvisory.com/29079/fundamental-valuation/do-high-dividend-stocks-really-beat-the-market/


The Fama French 1993 paper analyzed dividends at the end and found that the effects of the observed dividend to price ratio could be fully explained by their book-equity/market-equity ratio. In other words, it's better to look at book-equity/market-equity ratio rather than dividends.


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