The Effect of the Dividend Factor on Investment Attractiveness of Russian Equities

Alexander E. Abramov – Head of Department for Analysis of Institutions and Financial Markets of the Russian Presidential Academy of National Economy and Public Administration, Candidate of Economic Sciences (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Alexander D. Radygin – Chairman of Academic Board, Head of Center for Institutional Development, Ownership and Corporate Governance of the Gaidar Institute; Director of Institute for Applied Economic Studies, Russian Presidential Academy of National Economy and Public Administration, Doctor of Economic Sciences (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Maria Ig. Chernova – Research fellow of the Russian Presidential Academy of National Economy and Public Administration (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

In the past few years, numerous Russian companies have increased dividend payments to underpin their equities’ attractiveness for investors. In this context, a question arises: to what extent such strategies are justified for investors and do they actually permit to receive income higher than the market one? The research has established that in 2012–2018 investments in equities with a high dividend yield as per the general income criterion (with dividends accounted for) made it possible to outperform both a broad market portfolio and the level of yield on equities with low dividends. However, in a longer period (2005–2018) the investments in a broad market portfolio and equities without dividends turned out to be more profitable and this factor puts in question the application of the dividend growth strategy for long-term prospects.

Key words: dividends, factor investing, dividend yield, equity indices, investment strategies.