S&P 500 Dividend Payers Outperform Non-Payers in December

For the month of December and the entire 2008 calendar year, the dividend paying stocks in the S&P 500 Index outperformed the non-payers on an average return basis. In the month of December, the payers returned 4.41% versus the non payers return of 3.88%. For the 12-months of 2008, as the below table notes, both payers and non-payers underperformed the market cap weighted total return of the S&P 500 Index.

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Source: Standard & Poor's

Comments

[Paul Price:]

Counter-intuitively I think that many non-dividend paying stocks are going to start outperforming due to the hits company shares will take when payouts get reduced in the future.

As risk aversion retreats the shares of the non-yielders which got hit the hardest in the downturn should lead the market in its rebound.

So many people found solace in dividend paying shares during the panic periods that those same 'safe-havens' may now act as a relative negative.

Jan 04 09:23 AM