Societe Generale examines how the global hunt for income has reshaped equity investing, arguing that high quality dividend stocks may offer stronger long term risk adjusted outcomes than bonds or traditional yield strategies. The paper also challenges the idea that buybacks replace dividends using debt.
The Global Income Investor Slide Pack
Societe Generale
Andrew Lapthorne
Research
110 Pages
Key Takeaways
Dividend Reinvestment Power: Since 1970, equities with reinvested dividends delivered roughly 6% annualized real returns, versus about 1% when dividends were spent.
Quality Screens Matter: SGQI required 4% yields, Piotroski scores above 7, and top 40% Merton rankings, producing lower drawdowns than global equities since 1990.
Yield Traps Exist: Stocks yielding above 10% frequently underdelivered realized income after cuts, while dividend cutters saw excess returns fall nearly 6% within five trading days.
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