8 Dividend Stocks Showing Above Market Performance
by: Dividends4Life July 14, 2010

My goal as a dividend growth investor is to build a steadily increasing income and not necessarily to outperform the market via capital gains. However, as numerous research projects have shown, a conservative dividend-based investment strategy has consistently outperformed the market over time. Now that we are past mid-year, let’s take a look at some of the above average dividend performers for the first six months.

As a benchmark, the S&P 500 (SPY) was down 6.93% on a dividend adjusted basis. The following dividend growth stocks were able to best the S&P and provide a positive return:

Procter & Gamble Co. (PG) is focused on providing branded consumer goods products. The Company markets its products in more than 180 countries.
- YTD Dividend Adjusted Return: 0.40%
- Current Yield: 3.10%

Pepsico, Inc. (PEP) is a global snack and beverage company. The Company manufactures, markets and sells a range of salty, convenient, sweet and grain-based snacks, carbonated and non-carbonated beverages and foods.
- YTD Dividend Adjusted Return: 1.74%
- Current Yield: 3.00%

Clorox Corporation (CLX) is a global snack and beverage company. The Company manufactures, markets and sells a range of salty, convenient, sweet and grain-based snacks, carbonated and non-carbonated beverages and foods.
- YTD Dividend Adjusted Return: 3.55%
- Current Yield: 3.40%

Sysco Corp. (SYY) engages in the marketing and distribution of a range of food and related products primarily for foodservice industry in the United States and Canada.
- YTD Dividend Adjusted Return: 4.00%
- Current Yield: 3.40%

Genuine Parts Company (GPC) is a leading wholesale distributor of automotive replacement parts, industrial parts and supplies, and office products.
- YTD Dividend Adjusted Return: 6.08%
- Current Yield: 4.00%

Canadian National Railway Company (CNI) operates Canada’s largest railroad, linking customers in Canada, the U.S., and Mexico through approximately 20,400 miles of track.
- YTD Dividend Adjusted Return: 6.54%
- Current Yield: 1.80%

McDonald’s Corp. (MCD) is the largest fast-food restaurant company in the world. Its restaurants serve a varied, yet limited, value-priced menu in more than 100 countries around the world.
- YTD Dividend Adjusted Return: 7.28%
- Current Yield: 3.20%

Realty Income Corp. (O) engages in the acquisition and ownership of commercial retail real estate properties in United States.
- YTD Dividend Adjusted Return: 20.45%
- Current Yield: 5.50%

Obviously, not all dividend stocks outperformed the S&P. Below are some high-profile under-performers during the first 6-months of 2010:

Chevron Corp. (CVX) is a global integrated oil company that has interests in exploration, production, refining and marketing, and petrochemicals.
- YTD Dividend Adjusted Return: Down (10.18%)
- Current Yield: 4.00%

The Coca-Cola Company (KO) The Coca-Cola Company is the world’s largest soft drink company. It engages in the manufacture, distribution, and marketing of nonalcoholic beverage concentrates, fruit juices and syrups worldwide.
- YTD Dividend Adjusted Return: Down (10.60%)
- Current Yield: 3.40%

Abbott Laboratories (ABT) is engaged in the discovery, development, manufacture and sale of a diversified line of healthcare products including: drugs, nutritional products, diabetes monitoring devices and diagnostics.
- YTD Dividend Adjusted Return: Down (11.99%)
- Current Yield: 3.70%

Nucor Corporation (NUE) is engaged in the manufacture and sale of steel and steel products. As the largest mini-mill steelmaker in the U.S., Nucor has one of the most diverse product lines of any steelmaker in the Americas.
- YTD Dividend Adjusted Return: Down (16.56%)
- Current Yield: 3.60%

So what does all this mean? For me, the more relevant list is the latter. When a stock under performs the market (assuming there is not a fundamental reason for doing so), two important things are happening: 1.) it is becoming relatively cheaper and 2.) its dividend is becoming more attractive relative to the market. The opposite is occurring for the stocks listed in the first group.

Full Disclosure: Long PG, PEP, CLX, SYY, GPC, MCD, O, CVX, KO, ABT, NUE. See a list of all my income holdings here.

About the author: Dividends4Life
My entire career has been spent in industry within the finance and accounting realm. My career started in 1985 and has included exposure to implementing SFASs; business and financial analysis; mergers and acquisitions; designing and implementing financial systems; and regulatory reporting. Currently, I am in charge of the corporate finance and statutory reporting for a public U.S. corporation. Born in 1962, I was in the last group of baby boomers. I am married to a wonderful lady and we have two children.

You can visit my blog at Dividends Value (http://dividendsvalue.com/).

Join Us