S&P 500 Dividend Yield Falls Behind Treasuries, Ending a Decade-Long Advantage
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Only 3.85% of S&P 500 stocks now yield more than the 10-year Treasury — the lowest since May 2007 — ending a decade in which equities served as the go-to income asset over bonds.
What does the 3.85% figure actually mean?
Out of roughly 500 S&P constituents, only about 19 stocks still offer a dividend yield above the 10-year Treasury rate.
The data comes from Ned Davis Research, shared by Schwab chief investment strategist Liz Ann Sonders.
This means → the vast majority of U.S. equities now pay less in dividends than a plain government bond pays in yield — Treasuries have reclaimed the income throne.
How different was the picture a decade ago?
In July 2016, a full 63.4% of S&P 500 members out-yielded the 10-year Treasury (excluding pandemic-era distortions).
In plain terms = rates were so low that bonds offered almost nothing; investors had to hunt for "dividend stocks" to generate any income at all.
The drop from 63.4% to 3.85% reflects a fundamental reversal in the rate environment: bonds are once again a competitive income tool.
Why are Treasuries winning again?
The core driver is rising bond yields — the 10-year Treasury rate now sits well above the dividend yield of most blue-chip stocks.
This means → an income-seeking investor can earn a higher, lower-risk cash return simply by buying government bonds instead of dividend stocks.
For income-oriented portfolios, equities' relative appeal has narrowed sharply, and the decade-long case for "stocks as bond substitutes" has run its course.
Content is for reference only, not financial advice.