Survey and Market-based Evidence of Industry-dependence in Analysts' Preferences Between the Dividend Yield and Price-earnings Ratio Valuation Models

doi:10.1111/1468-5957.00261

Paper

Survey and Market-based Evidence of Industry-dependence in Analysts' Preferences Between the Dividend Yield and Price-earnings Ratio Valuation Models

Published Apr 1, 1999 · R. Barker

Journal of Business Finance & Accounting

UNKNOWN SJR score

96

Citations

18

Influential Citations

Full textSemantic Scholar

Abstract

Prior research has shown that analysts’ preferred valuation models are the price-earnings (PE) ratio and the dividend yield. This paper presents strong evidence that the relative importance of these two models varies according to stock market sector. Companies in the services, industrials and consumer goods sectors are shown to be ‘PE-valued’ while financials and utilities companies are shown to be ‘yield-valued’. These findings are derived from survey research and then tested in a market-based model. This use of independent, mutually reinforcing research methods contributes to the robustness of the findings.

Highly Cited

Study Snapshot

Analysts' preferences between price-earnings ratio and dividend yield vary by stock market sector, with services, industrials, and consumer goods companies being 'PE-valued' and financials and utilities being 'yield-valued' respectively.

PopulationOlder adults (50-71 years)

Sample size24

MethodsObservational

OutcomesBody Mass Index projections

ResultsSocial networks mitigate obesity in older groups.

Survey and Market-based Evidence of Industry-dependence in Analysts' Preferences Between the Dividend Yield and Price-earnings Ratio Valuation Models

References

Citations