We recently published a list of Why Are These 10 Dividend Stocks Declining? In this article, we are going to take a look at where Prudential Financial, Inc. (NYSE:PRU) stands against other declining dividend stocks.
The dividend season is here, and the big announcements are rolling in!
The overall market atmosphere has been moderately negative since the new tariffs from the US. Soon after he entered the Oval Office, President Donald Trump announced a 25 percent tariff on imported goods from Canada and Mexico. Chinese products, meanwhile, are left tackling an even higher tariff of 60 percent.
As a result, on Monday this week, the broader market noted a sharp decline of 0.76 percent, while the Nasdaq reported the same trajectory but at 1.20 percent.
Regardless of market conditions, investors have consistently shown interest in dividend stocks, particularly those from companies that have steadily increased their payouts, making them popular among income-focused investors. Analysts have long tracked the performance of Dividend Aristocrats, both historically and in recent times.
In a January 2019 blog post titled “Dividend Growth Strategies and Downside Protection,” Phillip Brzenk, Global Head of Multi-Asset Indexes, examined how dividend growth strategies perform, especially during market downturns. He noted that since the end of 1989, there have been six calendar years where the broader market delivered negative returns. Interestingly, during each of those years, the Dividend Aristocrats outperformed the broader equity benchmark by an average margin of 13.28%. In addition, in three of those challenging years, they still managed to generate positive total returns. Brzenk further pointed out that when analyzed on a monthly basis, the Dividend Aristocrats outperformed the market 53% of the time, with an average outperformance of 0.16%.
As noted earlier, dividend growth stocks have outperformed the broader market. From its launch in 2005 through September 2023, the Dividend Aristocrats Index delivered a total return of 10.35%, exceeding the broader market’s 9.54% return over the same period. Moreover, these stocks experienced lower volatility, measured at 15.35%, compared to the market’s 16.31%. This suggests that their prices tend to be more stable, making them less susceptible to sharp fluctuations and highlighting their overall resilience.
In the list of underwhelming performers we will be looking into today, the dividend companies with a minimum of $1 billion in market capitalization alone are considered. Then we checked the returns of these stocks and selected 10 stocks that fell on February 6, 2024. The stocks are ranked according to their dividend yields, as of February 6. We also hedge fund sentiment for each stock, as of Insider Monkey’s database of Q3 2024.
