Dividend Paying Stocks Struggling Mightily

In a post last month we highlighted the fact value strategies and dividend paying strategies were lagging both the S&P 500 Index and the S&P 500 Growth Index over the past twelve months. Frequently the value type stocks have a dividend component that provides additional return for investors. Further confirmation that dividend paying strategies have been underperformers can be seen below. S&P Dow Jones Indices reports the average performance of the dividend payers in the S&P 500 Index have lagged the non payers by a wide margin, both year to date and over the course of the past twelve months as of April 30, 2015. For the one-year period the payers' return of 12.85% falls far short of the non-payers' return of 20.64%.

This difference in return for the average or equal weighted return versus the cap weighted return noted above has carried over to the the performance of the Guggenheim S&P 500 Equal Weight ETF (NYSEARCA:RSP) return versus the capitalization weighted S&P 500 Index. As the below chart shows, the equal weight index has outperformed the capitalization weighted S&P 500 Index for the past year and a half.

Source: Seeking Alpha

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