Author and Wharton Professor Jeremy Siegel says dividends could — and should — be coming back into favor. In an interview with The Motley Fool’s Morgan Housel, Siegel discusses the reasons why dividend payouts have declined over the years, including tax issues and the fact that the rise of stock options as compensation have given many executives incentive to push profits back into share-price-boosting efforts, not dividend payouts. But Siegel says his research shows that companies that pay the highest dividends tend to provide their investors with the best total returns. Over the past 55 years, he says, “it’s black and white — those with the higher dividend yields have given better total returns with actually lower risk for the shareholders.” In a separate video, Siegel discusses why so many forecasters missed the 2008 financial crash.
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