30-Year Treasury Yield Beats Dividend Stock Payouts by Widest Gap in 19 Years

The 30-year Treasury bond is now out-yielding dividend stocks by 2.2 percentage points, according to The Motley Fool, a gap that has not been this wide in 19 years. The long bond's yield has climbed to levels last seen nearly two decades ago, making risk-free government debt more attractive on an income basis than many equity income plays. The comparison matters for income-focused investors who have historically favored dividend stocks over bonds for steady cash flow, since equities also carry the potential for capital appreciation that bonds lack. When the gap has widened this much in the past, it has coincided with periods of stress for dividend-paying stocks, according to the report. What's unresolved is whether the current gap reflects a durable shift in the relative attractiveness of bonds versus equity income, or a temporary dislocation that narrows if the Federal Reserve moves to cut rates.