@article {Cornell122, author = {Bradford Cornell}, title = {Dividend-Price Ratios and Stock Returns: International Evidence }, volume = {40}, number = {2}, pages = {122--127}, year = {2014}, doi = {10.3905/jpm.2014.40.2.122}, publisher = {Institutional Investor Journals Umbrella}, abstract = {A widely replicated result, using U.S. data, is that dividend-price ratios predict future returns, not future dividend growth. This is evidence of stock-return predictability, and is contrary to the original interpretation of the efficient-market hypothesis. The author argues that this pre-dictability may be an artifact of the American economy{\textquoteright}s remarkably stable real growth. This article examines the relation between dividend yields, future returns, and dividend growth, using current international data. It concludes that, in some countries, dividend-price ratios predict future returns; in other countries, they predict future dividend growth; and in still other countries, they predict a combination of the two. The variation, furthermore, is related to the volatility of real dividend growth.TOPICS: Accounting and ratio analysis, statistical methods, global}, issn = {0095-4918}, URL = {https://jpm.pm-research.com/content/40/2/122}, eprint = {https://jpm.pm-research.com/content/40/2/122.full.pdf}, journal = {The Journal of Portfolio Management} }