Dividend stocks aren't as great as they used to be

"The average dividend spread in our coverage is 1.9% currently," noted an analyst team led by Nik Modi, "compared to 2.1% in the past 5 and 10 years."

Narrower spreads were caused by fluctuations in the 10-year Treasury rate and changes in dividend policies, the team said.

"Although average dividend yields did not change much, the spreads vs 10Y T-bond are narrower today vs the 10-year average, but slightly wider than the 5-year average," they added.

Meanwhile, some peculiar changes have come about in the consumer staples sector.

First, while dividend yield measured for the consumer staples index remains constant at 2.6%, spreads over the Treasury rate has changed from negative to positive.

Secondly, tobacco stocks no longer earn the highest dividend yield among consumer staples.

In fact, the team noted, "at present, KO (Coca Cola) has a higher dividend than MO (Altria Group). This compares to MO carrying a dividend yield that has historically been 200 bps-plus higher than KO." This could be due to investor concerns over Coca Cola's core business, combined with investor excitement over consolidation in the tobacco industry, they said.

RBC Capital