30-Year Treasury Yield Hits 5.33%, Beating SCHD by 2.2 Points
Updated
Updated · The Motley Fool · Aug 22
30-Year Treasury Yield Hits 5.33%, Beating SCHD by 2.2 Points
3 articles · Updated · The Motley Fool · Aug 22
Summary
A 5.33% 30-year Treasury yield now tops the Schwab U.S. Dividend Equity ETF's roughly 3.1% yield, giving income investors a government-backed alternative not seen since 2007.
Inflation and government-spending worries drove long-term rates higher, opening the spread through a bond selloff rather than through weaker dividend payouts.
In 2007-09, buyers who locked in similar long-bond yields gained as rates later collapsed, while U.S. companies logged 606 negative dividend actions in 2008 and 804 in 2009.
SCHD differs from that era because it screens for 10 straight years of dividends and financial strength, but a 5.3% Treasury still pressures income-stock valuations if recession risks rise.