Was August a Tough Month for Dividends?

As I noted in last week's post, dividend payers under performed the non-payers in the month of August. However, performance wasn't the only area where the dividend strategy struggled.

In the month of August, only eight companies increased their dividends versus 17 in August of 2007.

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Standard & Poor's noted that:

Outside of the S&P 500, the numbers are worse with 43 decreases (the most decreases since 1982 with 60 decreases), and 114 increases which is the least amount of increases since 2002 (108).

For overall market performance a few positives were evident in the market:

• Breadth turned positive, with 320 issues gaining (average +7.01%) and 177 declining (average -5.31%).
• A rotation out of energy and materials and into early cyclical sectors, like consumer discretionary, may have begun last month. Discretionary stocks made the largest contribution to the S&P's performance last month by returning 7.03%.

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Lastly, the market's action on Friday may have served as a near retest of the lows reached in July. Constructively, higher downside volume, a capitulation type-trading day, would certainly allow for making a stronger case for higher prices longer term.

 

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Source:

Market Attributes Snapshot S&P 500 (PDF)

Standard & Poor's

By: Howard Silverblatt

August 2008

http://www2.standardandpoors.com/spf/pdf/index/MktAtt_Snapshot.pdf