Dividend Stocks Struggle In 2012

Includes: SPY
by: Bespoke Investment Group

Later this afternoon we'll publish our 2013 outlook piece. One of the sections looks at what drove stock performance in 2012, and below we take a look at one characteristic that didn't bode well for stocks during the year. In the chart, we broke up the S&P 500 into deciles (10 groups of 50 stocks each) based on dividend yield, and then we calculated the average 2012 performance of the stocks in each decile.

As shown, the deciles of the lowest yielding S&P 500 stocks posted big average gains of more than 16% in 2012, but the decile of the highest yielding stocks actually saw an average decline of 0.6%. While the average S&P 500 stock gained more than 12% in 2012, a lot of the highest dividend payers (including a lot of utilities companies) couldn't even finish the year in the green.