High Dividend Research

TWEEDY, BROWNE FUND INC.

Tweedy, Browne Wo rld wide High Divid end Yield Value Fund

350 Park Avenue New York, NY 10022 Telephone 800.432.4789 Facsimile 212.916.0626 www.tweedy.com

The High Dividend Yield Return Advantage: An Examination of Empirical Data Associating Investment in High Dividend Yield Securities with Attractive Returns Over Long Measurement Periods.

“The deepest sin against the human mind is to believe things without evidence”. -T.H. Huxley

In the pages that follow, we set forth a number of studies, largely from academia, analyzing the importance of dividends, and the association of high dividend yields with attractive investment returns over long measurement periods. You may be familiar with our prior booklet, What Has Worked In Investing, where we provided an anthology of studies which empirically identified a return advantage for value-oriented investment characteristics. In the same spirit, we attempt to examine what some in our industry have referred to as the “yield effect”; i.e., the correlation of high dividend yields to attractive rates of return over long measurement periods. Much has been written about dividends, and what is contained herein is not meant to be an exhaustive analysis, but rather a sampling of studies examining the impact of dividends on investment returns. We hope it will provide you with added insight and confidence, as it did us, in pursuing a yield-oriented investment strategy.

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TWEEDY, BROWNE FUND INC.

WHY DIVIDENDS ARE IMPORTANT

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Over the long term, the return from dividends has been a significant contributor to the total returns produced by equity securities. There is an abundance of empirical evidence which suggests that portfolios consisting of higher dividend yielding securities produce returns that are attractive relative to loweryielding portfolios and to overall stock market returns over long measurement periods. Stocks with high and apparent sustainable...