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Do High-dividend Stock ETFs Beat the Market?

October 12, 2023 • Posted in Fundamental Valuation

A subscriber asked about current evidence that high-dividend stocks outperform the market. To investigate, we compare performances of 10  exchange-traded funds (ETFs) holding high-dividend stocks to that of SPDR S&P 500 (SPY) as a proxy for the U.S. stock market. The  high-dividend stock ETFs, from oldest to newest, are:

For each of these ETFs, we compare average monthly total (dividend-reinvested) return, standard deviation of monthly returns, monthly return-risk ratio (average monthly return divided by standard deviation), compound annual growth rate (CAGR) and maximum drawdown (MaxDD) to those for SPY over matched sample periods. Using monthly total returns for the 10 high-dividend stock ETFs and SPY over available sample periods through September 2023, we find that:


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