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Despite volatility, it pays more to hold stocks than bonds

The sharp sell-off in equities and falling bond yields following the U.K. referendum have pushed the spread between the S&P 500 dividend yield and the US 10-year Treasury to levels not seen since the housing crisis of 2009.

The S&P 500 dividend yield also pushed above the 10-year Treasury yield in 2009 and 2012, reversing a more than 40-year trend. As of Wednesday morning, the S&P 500 dividend paid almost 0.64 percentage points above that of U.S. 10-year Treasury.

A positive spread is considered bullish for equities because investors can expect to receive more in payments from owning the S&P 500 index than they could from Treasurys.

The dividend yield currently is at 2.1 percent and has stayed above 2 percent for most of the year. That's a 0.17 point increase from the same period last year.

The benchmark Treasury yield fell below the dividend yield at the beginning of 2016, hitting a four-year low of 1.406 earlier this week. It currently stands at around 1.46 percent.

In the three periods when the dividend yield has traded above Treasurys in recent history, the S&P 500 gained an average of more than 10 percent.

While the strategy of owning dividend-paying stocks already appears popular this year, the recent political and economic uncertainty after Britain's vote to leave the European Union and the weakening stock market may encourage investors to hunt for solid dividend stocks.

In fact, the ProShares S&P 500 Dividend Aristocrats ETF, which tracks the performance of high-quality dividend stocks, was up almost 8 percent this year as of Wednesday morning. Similarly, iShares Core High Dividend ETF, which tracks companies with high dividend payouts, was up almost 10 percent. Meanwhile, the S&P 500 ETF Trust was up 1.25 percent over the same period.

Dividend stocks may be offering higher yields than Treasurys, but not all of them are created equal. A recent report by FactSet Insight cautions investors against blindly buying stocks with high payout ratios.

Companies that are paying more in dividends than they generate in earnings may face problems soon if earnings continue to fall and growth prospects are limited, according to the report.

"Maintaining these payout ratios may be unsustainable for some companies, and the stock prices of these firms could be negatively impacted if they decide to cut dividends down the road," the authors wrote.

Overall, the ratio of dividends paid to earnings has been increasing in recent years, with nearly 1 in 5 companies in the S&P 500 paying more than they earned in the last fiscal year, according to a CNBC analysis.

As with any other investment strategy, there's no magic formula. But investors should look carefully at company metrics to choose companies that can provide stable dividends during periods of high volatility.