Australian companies that have consistently paid a high proportion of dividends as a percentage of earnings have outperformed since the announcement of QE3 (the third US quantative easing cycle).

Credit Suisse (CS) has compared the relative merit of companies with high EPS growth versus high DPS growth, and then determine what investors value more.

CS have analysed the Australian market to determine whether dividend-based investment styles have recently outperformed earnings-based investment styles in the long-only space. CS show that over the past two years that by buying high dividend shares, this has been the primary determinant of outperformance either by looking at long only or long short portfolios. CS conclude that dividend based investment styles are potentially becoming more dominant due to a proportionate rise in income seeking investors because these investors are typically long-only investors.

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