The Role of Stock Dividends

 

View from the Observation Deck

  1. Standard & Poor's tracks the performance of the dividend-paying issues in the S&P 500 versus the non-paying issues. Shares are weighted equally. 
  2. The chart above shows that the dividend-payers have outperformed the non-payers in 10 of the last 12 calendar years.
  3. It also shows that the S&P 500 dividend-payers posted negative total returns in just two calendar years (2002 & 2008), while the non-payers posted negative returns in six (2000, 2001, 2002,2007, 2008 & 2011).
  4. The number of constituents in the index that pay a dividend has risen from a low of 351 in 2002 to 394 in 2011, according to S&P.
  5. The dividend yield on the S&P 500 (market cap-weighted) was 2.12% as of the close of 2011.
Posted on Thursday, January 5, 2012 @ 11:00 AM

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.