By Numer de Guia, CFA This week, we're going to try something a little different and take a long-term view of a short-term phenomenon. To wit: Which stocks have done the best in the first quarter of the calendar year -- in each year of a multiyear period? While there are no guarantees, identifying attractive stocks that have shown seasonal strength -- even in down years -- can be useful in deciding which shares to buy as 2005 gets underway.
We started by looking for those companies that have posted a positive
total return -- capital appreciation plus dividends -- in the first quarter of every calendar year since 2000. To add to their appeal, each stock on the list has to pay a quarterly dividend.
Furthermore, those names have to jump through one final hoop. To make sure they show good potential for gains beyond the first quarter, each has to carry an S&P investment ranking of 4 STARS (buy) or 5 STARS (strong buy). S&P equity analysts expect stocks with those designations to outperform the overall market in the next 6 to 12 months.
Eighteen names made the cut. The average current
dividend yield of these stocks is 3.69%, and the range is 0.18% to 8.9%. Note also the heavy presence of
real estate investment trusts on the list.
Dividend-Paying First Quarter Winners
S&P STARS Rank
American Capital Strategies
Glimcher Realty Trust
Sovran Self Storage
Developers Diversified Realty
CBL & Associates
Acadia Realty Trust
Simon Property Group
Pan Pacific Retail Properties
Bank of Hawaii
McCormick & Co.
De Guia is an analyst for Standard & Poor's Portfolio Advisors