ber 1957, she would have accumulated $176,134 by the end of 2006, for
an annual return of 11.13 percent. An identical investment in the 100
highest dividend yielders accumulated to over $675,000, with a return of
14.22 percent.
The highest dividend yielders also had a beta below unity, indicat-
ing these stocks were more stable over market cycles, as shown in Table
9-2. The lowest-dividend-yielding stocks not only had the lowest return
but also the highest beta. The annual return of the 100 highest dividend
yielders in the S&P 500 Index over the past 50 years was 3.78 percentage
points per year above what would have been predicted by the efficient
markets model while the return of the 100 lowest dividend yielders
would have had a return that was 1.68 percentage points per year
lower.
146 PART 2 Valuation, Style Investing, and Global Markets
FIGURE 9–2
Historical Analysis of the S&P 500 Index, 1957 to 2006