How does dividend yield impact stock movements in a downturn? Which dividend stocks best survive turbulent markets? To answer these and other related questions about performance in severe market downturns, stocks were screened and sorted based on their performances over the week-long downturn that lasted through August 9th, 2011. Over the course of this week, the S&P500 index dropped over 13.3% while the mean drop for a broader sample of 4541 equities was 10.1%, providing an opportunity to observe sector differences during extreme market drops.
These investigations found that the winning stocks featured primarily small caps, that utilities have proven to be the most resilient sector, and that the worst performing industry was Hotel/Motel REITs. Analysis of dividend stocks reveals no significant relationship between performance in the drop and dividend yield. Across all stocks, less than 2% of the variance in performance is accounted for by dividend yield.
Source: Seeking Alpha
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