I think retail guys love div stocks because they don't realize that when a div gets paid the stock price drops by the same amount. You wont't believe how many people think its just "free money". You even see strategies where people buy the stock before ex-date and sell after. Bonkers.
Could you make money by buying a div stock a bit of time before the dividends are distributed, but then sell BEFORE dividends, then short it until after dividends and people sell?
Good remark. I always tell people that a trade exists because a trade exists. In this case you're trying to game the "dumb" money. Question is how much alpha is there? If any, is it arbitraged out by people who have made the same observation as you? So something that worked in a backtest may cease to work when you implement it.
Stock splits are famously positive alpha events. The mere fact that a stock has now become more "affordable" because of a lower per share price causes people to buy it. But I don't think any professional investor in their right mind would trade such a strategy.
The pre ex date div strategy you suggest may be more relevant because there's a higher frequency of events. The effect may be more pronounced in more "retail" investor focused names. I wouldn't trade it in its own. But maybe group it together with a suite of other signals in a stat arb like strategy.
I would agree with you that div stocks are more expensive on a Price-to-Earnings basis. Check this comparison: https://pages.etflogic.io/?compare=DVY|SPY|XLU
High yield (3%+) div ETFs like DVY and XLU are trading near 25 P/Es whereas the S&P is closer to at 22 PE yielding just above 1%.
As interest rates tick down people look for income/yield. So high div stocks get bid up because of this