Total Returns for S&P 500 Dividend Aristocrats Index vs. S&P 500 Index : Chart

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Over the long term dividends constitute a significant portion of the total returns of any dividend paying stock or investment. Due to the effects of compounding returns tend to multiple many times over the years even if the start point of the dividend yield is low. For instance, the current dividend yield on the S&P 500 is 1.62%. However over many years or decades the total return of the S&P 500 index would be higher than the price returns as reinvested dividends grow many times over.

Another way to earn higher total returns is by investing in companies that increase dividends consistently over time. This strategy easily beat the total returns on the S&P 500 index. According to an article by Yoichiro Kai at T.RowePrice the difference in returns between firms that increased dividends and the S&P 500 is substantial.

From the piece:

That importance is even clearer with sustained dividend growth. As an example, the S&P 500 Dividend Aristocrats Index, which represents over 60 S&P 500 companies with 25 consecutive years of dividend increases, has outperformed the S&P 500 Index by more than 75% since 1989 (Figure 4). By identifying companies with the ability to sustain and grow dividends and taking an active, global approach, we believe we have the potential to drive consistent long‑term returns.

(Fig. 4) Indexed total returns for S&P 500 Dividend Aristocrats Index and S&P 500 Index:

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Source: Tapping the Power of Global Equity Dividends by Yoichiro Kai at T.RowePrice

Related ETF:

  • SPDR S&P 500 ETF (SPY)
  • Vanguard S&P 500 ETF (VOO)

Disclosure: No positions

The World’s Top 10 Best-Selling Passenger Cars in 2022

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The Global Automotive Market Research Company JATO recently published a report on the top best-selling 10 cars in 2022. According to this report, two models of Tesla are in the list. Japanese auto giant Toyota (TM) was the top selling auto maker accounting for 13 out of 100 light vehicles sold worldwide. The world’s top seller was Toyota RAV4 followed by the Corolla model. Tesla’s Model Y came in at number three and Model 3 at number 10. Apart from Toyota and Tesla(TSLA), the other auto makers with winners in the ranking include Honda(HMC), Nissan(NSANY) and Ford(F).

The World’s Top 10 Best-Selling Passenger Cars in 2022:

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Source: Tesla places two models in the world top 10 best-selling vehicles in 2022

It is astonishing that EV maker Tesla’s models are in the world’s top selling passenger cars.

Disclosure: No positions

The Worlds Biggest Dividend Payers 2022

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Janus Henderson Investors recently released their 38th edition of the Janus Henderson Global Dividend Index report. The report is based on a study of the dividends of the 1,200 largest firms in the world by market capitalization. Overall 2022 was a great year for dividend investors as most of these firms raised their dividend payouts. The top dividend payer in 2022 was BHP Group Ltd (BHP) followed by Petrobras (PBR) of Brazil, Microsoft (MSFT), Exxon Mobil(XOM) and Apple (AAPL) of the US. The world’s biggest 20 dividend paying companies are shown in the table below:

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Source: Janus Henderson Global Dividend Index

Energy companies dominate this list as oil prices soared last year and profits gushed at these firms.

The full report at the above link is a worth a read.

Disclosure: Long PBR

Selling Stocks During Geopolitical Crises is Not Smart

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Investing in equity markets comes with a variety of risks. One of the risks that investors have to deal with occasionally is the risk of political crisis events. Unlike other factors, these are beyond the control of any investors. Hence it is important to analyze and determine how to react to such events. Panicking and selling out during crises is not a wise strategy. According to research by Vanguard, past equities have performed well in the past geopolitical crises. After the initial sell-off stocks recovered and were in the positive territory after 6 months and also 1 year as shown in the chart below:

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Source: Vanguard UK

So the key takeaway is that geopolitical events are to be expected in our highly interconnected world and selling equities such events should not be a strategy. Instead it is wise to ride out political storms and focus on the long-term goal of an investment. To take it further, it is smart move to acquire some companies on the cheap when other investors panic and liquidate their holdings. For instance, during the Brexit saga a few years ago many quality stocks were trading at throw-away prices.

Related ETF:

  • SPDR S&P 500 ETF (SPY)
  • iShares Core S&P 500 ETF (IVV)
  • Vanguard S&P 500 ETF (VOO)
  • SPDR Portfolio S&P 500 ETF (SPLG)

Disclosure: No positions