Bloomberg News

Dividend Stocks Poised to Shed Laggard Status: Chart of the Day

February 14, 2012

(COD_DIVIDEND_PAYING_STOCKS_021412. CHART OF THE DAY. Size: 3C X 3.75in. (146.0 mm X 95.25 mm) Expected by 15:00.)

Feb. 14 (Bloomberg) -- Dividend-paying stocks are still a “winning theme” for investors even though they have gotten off to a relatively slow start this year, according to Gina Martin Adams, a strategist at Wells Fargo Securities LLC.

The CHART OF THE DAY tracks the performance of the Standard & Poor’s 500 Dividend Aristocrats Index, composed of companies that have raised payouts for at least 25 consecutive years, relative to the S&P 500.

While the dividend-aristocrat index rose 4.2 percent for the year through Monday, the gain was 2.6 percentage points smaller than the S&P 500’s advance. By contrast, the indicator fared better than the S&P 500 in the past two years, its first back-to-back wins since 2002.

Payout ratios suggest companies can distribute plenty more money to shareholders, Martin Adams wrote Monday in a report. She noted that dividends equal 27 percent of S&P 500 earnings, the lowest figure in more than a century, according to data compiled by Yale University Professor Robert Shiller.

“Companies may be only just beginning to catch on to the fact that investors are keenly interested in dividend-paying stocks,” the report said.

Dividends may be in relatively high demand for years, Martin Adams wrote, as debt-reduction efforts result in slower earnings growth and an aging population favors investments that produce income.

--Editors: Stephen Kleege, Michael P. Regan

-0- Feb/14/2012 19:29 GMT

To contact the reporter on this story: David Wilson in New York at

To contact the editor responsible for this story: Nick Baker at

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