In practice, when interest rates on bonds & CDs are above 5%, stocks that simply produce income as dividends without prospect for huge capital growth (i.e. railroads and other basic industry) are always less attractive than the "risk-free" alternative. Like duh. When was the last time you saw a dividend rate above 5%? At least from a company that wasn't paying out more than it was getting in profits just to prop up its stock price?