The gap between dividend yields and corporate bond yields at European companies is at its widest point for 13 years, according to strategists at Goldman Sachs, who pointed to two likely outcomes: a rotation by investors from credit into equity, and a re-leveraging of corporate balance sheets.

In a note published yesterday, strategists led by Christian Mueller-Glissmann and Peter Oppenheimer, said that nearly half the companies in the Stoxx Europe 600 have dividend yields above the broad credit yields.