Dividend Stocks Underperforming The Market: Part II

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Includes: ABT, KO, PEP, PG, PM
by: Bear Fight

<< Return to Part I

I recently wrote an article about how popular dividend stocks have underperformed the broader S&P500. Part of the unintended consequences of the Federal Reserve's interest rate policy is that it is driving investors into dividend paying equities. The iShares Dow Jones Select Dividend Index Fund has underperformed the broader S&P 500 (NYSEARCA:SPY) 323 basis points.


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Investors who have flocked to dividend yielding equities should monitor this trend of underperformance over the next few months to see if they should rotate out of dividend equities. As the 10-year treasury remains below 2.0% investors have sought yield from equities. The equities below are large-capitalization U.S. equities that yield over 2.0% and trade at modest price-to-earnings ratios.

Company

Price

Change %

Philip Morris International (NYSE:PM)

$75.84

-3.50%

SPDR S&P 500 ETF Trust (SPY)

$132.68

4.07%

Abbott Laboratories (NYSE:ABT)

$54.45

-4.00%

Pepsico, Inc. (NYSE:PEP)

$66.40

0.00%

Procter & Gamble Co. (NYSE:PG)

$63.32

-5.25%

The Coca-Cola Company (NYSE:KO)

$67.83

-3.29%


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Philip Morris International, Inc. (PM)

  • Market Capitalization: $131.7 billion
  • Price to Earnings: 16.1x
  • Dividend Yield: 4.1%

Abbott Laboratories (ABT)

  • Market Capitalization: $84.8 billion
  • Price to Earnings: 18.1x
  • Dividend Yield: 3.5%

Pepsico, Inc. (PEP)

  • Market Capitalization: $103.8 billion
  • Price to Earnings: 16.7x
  • Dividend Yield: 3.1%

Procter & Gamble Co. (PG)

  • Market Capitalization: $174.1 billion
  • Price to Earnings: 18.6x
  • Dividend Yield: 3.3%

The Coca-Cola Company (KO)

  • Market Capitalization: $174.4 billion
  • Price to Earnings: 12.5x
  • Dividend Yield: 2.8%

Disclosure: I am long ABT.