S&P 500 Total Return Now At Y2K Level, Stocks Remain 17% Off

Posted by: Howard Silverblatt on November 4, 2010

Don’t tell holders of Automatic Data Processing, Campbell Soup, Leggett & Platt, or United Parcel Service that dividends don’t count - from 2000, their stocks are down, but with dividends added back in their returns are double-digit.

Based on the current intraday price, the S&P 500 stock price is 17.4% off its 12/31/1999 price. However, as I’ve been babbling for years, dividends count, and on a total return basis the index has now broke even with its Y2K level.

As for dividends, the debate regarding dividend plowbacks vs. dividend payouts continues, but to date, while there is evidence, there is no proof as to which is more beneficial to shareholders. It appears to come down to management - if they plowback the money wisely, then investors prosper, if they do not, investors don’t. Given that dividends don’t appear to be the determinant of good management - GIVE ME THE MONEY.
See file for data and issue level performance
DIVIDENDS COUNT.doc

Reader Comments

Roversider

November 7, 2010 4:42 PM

Does your "total return basis" factor in inflation? If it doesn't, as I suspect, the "total return" is more like a -20%.

Post a comment

 

About

Bloomberg Businessweek’s Ben Steverman focuses on the latest moves in financial markets and emerging trends in stocks, bonds, and funds, always with an eye toward giving readers a better understanding of the sometimes confusing and often chaotic world of money. Standard & Poor’s senior index analyst Howard Silverblatt will also provide his take on companies’ finances and the markets. Voted one of the “Top 100 Finance Blogs” in 2007.

BW Mall - Sponsored Links

Buy a link now!