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Dividend Payers Are Underperforming

Published Thu, 03 Aug 2017 14:23:02 -0400 on Seeking Alpha

A year ago dividend paying stocks were significantly outperforming the non payers in the S&P 500 Index and the S&P 500 Index itself. If investors were chasing performance back then and loading up on the payers, today, they would be disappointed. Below is a chart of the year-to-date performance of two dividend paying exchange traded funds, SPDR Dividend ETF (NYSEARCA: SDY) and iShares Select Dividend ETF (NYSEARCA: DVY). The return of the dividend-focused ETFs is nearly half that of the S&P 500 Index. The return difference is similar for one year. My year-ago post contains some details on both ETFs.

Below is S&P Dow Jones Indices' average return summary for the payers and non-payers in the S&P 500 Index as of July 31. The return difference is not as large as noted above due to ETF construction differences, for example, not using all 420 dividend paying stocks in the S&P 500 Index.

Source: S&P Dow Jones Indices
The fact the dividend payers are underperforming the non-payers as well as the broader S&P 500 Index itself seems to be further confirmation of investors seeming to favor growth oriented stocks over value ones.
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Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
ISHARES DOW JONES SELECT DIVIDEND INDEX FUND 97.37   0.0 0.00 3.24 3.36
SPDR S&P DIVIDEND ETF 94.14   0.0 0.00 2.40 2.53

ISHARES DOW JONES SELECT DIVIDEND INDEX FUND - DVY
ISHARES DOW JONES SELECT DIVIDEND INDEX FUND - DVY  


Older articles featuring Ishares Dow Jones Select Dividend Index Fund (DVY):
DVYE: This ETF Provides Broad Exposure To Emerging Markets, Has Outperformed Its Peers, And Yields 5.8%
Paying My Bills With Dividends - Q3 2018 Update
For Retirees, A Most Compelling Case For Dividend Growth And Modest Dividend Income
How Much Extra Dividend Income Do You Need To Be Safe?
UST Yields Vs. S&P 500 Dividend Yields
Dividend-Focused ETFs: How They Performed In Bull And Bear Markets
Can Dividend ETFs Provide Investors With An Annually Increasing Stream Of Income?
Searching For Big Juicy Dividends In The USA.
Snapshot Of Cumulative Dividends Cuts Through The End Of Q2 2018
The Naked Truth On These High Dividend ETFs

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