Monday, August 7, 2017

5 Big-Name Dividend Stocks Crushing The S&P 500

Most every investor has a benchmark they are trying to beat. For many investors, that benchmark is the S&P 500. It is easily followed and can be directly invested in via many different index funds such as SPDR S&P 500 (SPY) and Vanguard 500 Index Inv (VFINX).

Last year many dividend income oriented portfolios under-performed the S&P 500. The old adage that trees don't grow to the sky certainty holds true. Obviously, that is not to say that all dividend growth stocks have under-performed.

If we look carefully we can find some gems that have performed quite well so far this year. Below are several multi-billion dollar dividend stocks that have out-performed the S&P 500 this year, to date on an annualized basis:

Microsoft (MSFT), the world's largest software company, develops PC software, including the Windows operating system and the Office application suite.
Mkt. Cap: $564.9b | Yield: 2.1% | Adjusted Return: 35.2%

3M Co. (MMM) provides enhanced product functionality in electronics, health care, industrial, consumer, office, telecommunications, safety & security and other markets via coatings, sealants, adhesives and other chemical additives.
Mkt. Cap: $119.9b | Yield: 2.3% | Adjusted Return: 35.2%

McDonald's Corporation (MCD) is the largest fast-food restaurant company in the world, with about 35,000 restaurants in 119 countries.
Mkt. Cap: $126.4b | Yield: 2.4% | Adjusted Return: 56.3%

Johnson & Johnson (JNJ) is a leader in the pharmaceutical, medical device, and consumer products industries.
Mkt. Cap: $358.3b | Yield: 2.5% | Adjusted Return: 29.4%

Abbvie Inc. (ABBV) is a global research-based pharmaceuticals business that emerged as a separate entity following its spin-off from Abbott Laboratories at the start of 2013. AbbVie's key drug is Humira for rheumatoid arthritis.
Mkt. Cap: $111.5b | Yield: 3.7% | Adjusted Return: 26.9%

Over the same period the S&P 500 (SPY) was up 22.5%. The returns were calculated using the IRR() spreadsheet function, which takes into account the timing of dividends, buys and sells. Short-term performance is never the sole reason for long-term investors to buy. What goes up significantly, usually comes back down.

Full Disclosure: Long ABBV, MSFT, JNJ, MCD, MMM in my Dividend Growth Stocks Portfolio. See a list of all my Dividend Growth Portfolio holdings here.

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