Given the roller coaster the market has been on over the course of the past four or so months, it has been an environment that favors higher quality companies. It is the higher quality companies that exhibit strong cash flow and/or dividend payments that tend to hold up better in down market environments.
Through October, the average return of the dividend payers in the S&P 500 Index are outperforming the non-payers, 9.73% versus 7.83%, respectively. The payers are also outperforming the weighted S&P 500 Index return of 6.11% on a year to date basis.
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Source: Standard & Poor's