As might reasonably be expected, when you don't mess with the taxation of dividends, then over the longer term you typically see a more consistent correlation between stock prices and dividend values (this chart uses dividend yield * index = dividend value).
On the basis that dividend values rise in proportion to stock prices, but with dividend values tending to be somewhat smoothed with companies being under pressure to maintain/grow dividends (borrowing during the bad times to maintain dividends and then repaying those debts during better times), then dividend yield becomes a good proxy for relative stock price.
On the basis that dividend values rise in proportion to stock prices, but with dividend values tending to be somewhat smoothed with companies being under pressure to maintain/grow dividends (borrowing during the bad times to maintain dividends and then repaying those debts during better times), then dividend yield becomes a good proxy for relative stock price.
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