For the month of January 2010, dividend payers in the S&P 500 Index ($SPX) outperformed non payers. January saw the Index decline 3.70% compared to the payers' decline of 2.48% and the non payers' decline of 4.75%. This past January was the first in the last three years where there were no dividend decreases or dividend suspensions for companies in the S&P 500 Index (updated 2/3/2010: Valero (VLO) reduced its dividend 66% in January). In declining markets, dividend paying stocks, and especially dividend growers, tend to hold up better than the overall market.
Source: Standard & Poor's