RESEARCH: John Buckingham, manager of the Al Frank fund (VALUX) and Al Frank Dividend fund (VALDX), examined market data from 1928 through 2011 to study the performance of dividend-paying stocks.
FINDINGS: From May through October, the top dividend-paying stocks averaged a return of 4.11 percent, while the non-dividend payers lost an average 0.45 percent. There was a similar pattern for dividend-payers with smaller yields. The greater a stock’s yield, the higher its average return during those mid-year months.
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BROAD APPEAL: Investors deposited a net $26 billion into dividend-stock funds — usually labeled ‘equity income’ funds — over the 12 month period through May, according to industry consultant Strategic Insight. During that period, a net total of $174 billion was withdrawn from all other stock fund categories.
