Dividend Stocks Lose Favor

Investors are moving away from dividend-paying stocks this year, highlighting the flight from so-called high-quality companies into those that have been beaten down the most. So far, it's been one of the better trades in 2012. Non-dividend-paying stocks on the Standard & Poor's 500 [.SPX 1347.05 --- UNCH ] are up 8.3 percent, while dividend payers are down 1.3 percent and the index as a whole is up nearly 5 percent, according to data from Bespoke Investment Group.

That marks a sharp contrast from 2011, when companies paying dividends jumped 10.4 percent, easily outpacing the market as investors clamored for the yield they couldn't get from fixed income. Part of the move is probably a natural rotation that the market sees from one year to the next. But there also are underlying reasons why the big names are faltering — in particular unspectacular earnings that have some investors concerned that the market's upper echelon has reached a plateau.

Source: CNBC

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