Sunday, January 05, 2014

Dividend Payers Return Trails Non Payers In 2013

S&P Dow Jones Indices reports the equal weighted return of the dividend paying stocks in the S&P 500 Index trailed the non paying constituents in 2013. The equal weighted return of the payers totaled 40.67% versus the non payers return of 46.27%. However, for both groups, the equal weighted returns did outperform the overall cap weighted return of the S&P 500 Index which equaled 32.39%.

From The Blog of HORAN Capital Advisors
This outperformance by the equal weighted index resulted from smaller cap stocks within the index outperforming larger caps. A number of the larger cap stocks in the S&P 500 Index generated relative performance that was less than the overall index return. For example, Apple (AAPL, +7.6%), International Business Machines (IBM, -.5), Exxon Mobil (XOM, 19.8%) and Wal Mart (WMT, 18.1%) under performed the index while smaller caps like E-Trade (ETFC, +119.4%), Electronic Arts (EA, +58%), Genworth Financial (GNW, +106.6%), and First Solar (FSLR, +77.1%) generated significantly better returns than the overall index.

The below chart of the Guggenheim Equal Weighted S&P 500 Index ETF (RSP) is compared to the S&P 500 Index itself as well as a couple dividend paying ETFs: the SPDR Dividend ETF (SDY) and iShares Select Dividend ETF (DVY). The Guggenheim ETF outperformed the three other indices contained in the chart.

From The Blog of HORAN Capital Advisors

Lastly, the outperformance of smaller caps was evident in the capitalization based indices as well. The S&P MidCap 400 Index returned 33.5% and the S&P SmallCap 600 Index returned 41.3% in 2013.

Disclosure: Long XOM

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