10 Dividend Stocks That Are Beating the Bear Market

So far in 2009, the Dividend Aristocrats have under-performed the S&P 500. However there are several dividend stocks that have done quite well and beat the S&P 500 index, and some of those companies just might surprise you!

Below are ten dividend stocks that have out-performed the S&P 500 this year through May 15, 2009:

10. Coca-Cola Co (KO) - Return: 0.4% - Yield: 3.76%
The Coca-Cola Company engages in the manufacture, distribution, and marketing of nonalcoholic beverage concentrates and syrups worldwide. Risk Rating: Low (1.50) - Analysis

9. Sysco Corp (SYY) - Return: 0.5% - Yield: 4.20%
SYSCO Corporation, through its subsidiaries, engages in the marketing and distribution of a range of food and related products primarily for foodservice industry in the United States and Canada. Risk Rating: Low (1.00) - Analysis

8. BP ADR (BP) - Return: 1.4% - Yield: 7.37%
This supermajor integrated oil company (formerly BP Amoco p.l.c.) is based in London and is the world’s second largest publicly-owned oil company and the fourth largest U.S. refiner. Risk Rating: Medium (1.75) - Analysis

7. 3M Co (MMM) - Return: 1.8% - Yield: 3.52%
3M Co. is a diversified technology company with a presence in various businesses, including industrial & transportation, healthcare, display & graphics, consumer & office, safety, security & protection services, and electro and communications. Risk Rating: Low (1.50) - Analysis

6. Paychex Inc (PAYX) - Return: 4.1% - Yield: 4.63%
Paychex, Inc. provides payroll and integrated human resource and employee benefits outsourcing solutions for small- to medium-sized businesses in the United States. Risk Rating: Medium (1.75) - Analysis

5. Intel Corp (INTC) - Return: 5.6% - Yield: 3.69%
Intel Corporation engages in the manufacture and sale of semiconductor chips, as well as in the development of advanced integrated digital technology platforms for the computing and communications industries worldwide. Risk Rating: Medium (1.75) - Analysis

4. Canadian National Railway ADR (CNI) - Return: 7.0% - Yield: 2.24%
Canadian National Railway Company (CNI) operates Canada’s largest railroad, linking customers in Canada, the U.S., and Mexico through approximately 20,400 miles of track. Risk Rating: Low (1.25) - Analysis

3. Manulife Financial Corp ADR (MFC) - Return: 8.0% - Yield: 4.78%
Manulife Financial Corporation is a life insurance company with customers in the United States, Canada and Asia. It is the holding company of The Manufacturers Life Insurance Company and John Hancock Financial Services. Risk Rating: Medium (1.75) - Analysis

2. CenturyTel Inc (CTL) - Return: 13.5% - Yield: 9.27%
CenturyTel Inc. provides a range of telephone services in 25 states, with operations concentrated in Alabama, Arkansas, Louisiana, Missouri and Wisconsin. Risk Rating: High (2.50) - Analysis

1. Royal Bank of Canada ADR (RY) - Return: 22.8% - Yield: 4.47%
Royal Bank of Canada (RBC) offers a range of banking and financial services in North America and internationally. Risk Rating: Low (1.50)

Over the same period the S&P 500 (VFINX) was down 1.2%. The returns were calculated using Yahoo’s dividend adjusted stock price for December 31, 2008 as the starting point. Some interesting items to note: The list contains four ADRs (3 Canadian, 1 British). RY’s dividend has been frozen since November 2007. CTL is the only High Risk stock to make the list based on my risk rating. The top five were less traditional dividend stocks that had been beaten down to low levels.

Short-term performance is never the sole reason for long-term investors to buy. What goes up significantly usually comes back down. Case in point, last year's two dividend darlings, Wal-Mart (WMT) and McDonald's (MCD), found themselves in the bottom ten of this list, each down 13.2%.

Full Disclosure: Long in all the aforementioned securities. See a list of all my income holdings here.

Comments

[Living4Divi...:]

Great post. I have heard that Canadian Banks are safer than U.S. and many European banks.

I am just curious how you developed your risk rating system and how good it has performed at identifying SAFE dividends.

May 21 07:53 AM

[Lightway:]

Nice to see a bank stock finally make it back into a dividend screen. Living4Dividends, he has a page here where he describes his Risk Rating system:

dividendsvalue.com/151.../

May 21 10:12 AM

[Graham Jervis:]

PAYX all the way, wide moat, solid balance sheet, top class management.

May 21 03:08 PM

[Living4Divi...:]

Thanks Lightway


On May 21 10:12 AM Lightway wrote:

> Nice to see a bank stock finally make it back into a dividend screen.
> Living4Dividends, he has a page here where he describes his Risk
> Rating system:
>
> dividendsvalue.com/151.../
>

May 22 09:24 AM

[User 418760:]

Of the Canadian banks I like bank of Nova Scotia from a valuation point of view and it has a higher dividend.

May 23 12:57 AM

[Leif Peterson:]

Great article, keep the good news coming about high dividend yields. (there are other equities that are doing as well or better, and have grown over the last several quarters. Also, please respond if you can on the effect of hyperinflation on earnings and subsequent risk of cutting dividends, and whether it's likely that the Fed will counter hyperinflation by raising interests rates(?). On another note, someone in another forum compared the PFM (dividend ETF) to S&P500 over the last several years and suggested only a 2% comparative increase. First of all, isn't the yield of PFM only 2.81% -- which is low. Hence, they used the PFM/S&P500 ratio as an indicator of how well dividends did.

May 28 12:03 AM