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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 98.39   0.0 0.00 0.00 0.00
SPDR S&P DIVIDEND ETF 96.00   0.0 0.00 0.00 0.00

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):
Who To Follow: Delving Into Dividends & Income
Fed's Indecisiveness Benefits iShares Select Dividend ETF DVY
Dividend Growth Investing: It's About The Income: Individual Stocks Or ETFs? (Part 2)
Dividends By The Numbers In July 2017
Undervalued Aristocrats: Exclusive Dividend Aristocrat Buy And Sell Recommendations From Sure Dividend
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