Email of the day
Comment of the Day

October 24 2012

Commentary by Eoin Treacy

Email of the day

on the S&P500 dividend aristocrats:
“ Thank you for the excellent review of the autonomies today. I was trying to match some of those with the dividend aristocrats. With the help of your search engine I found a list of SP Europe dividend aristocrats on your review of Oct 17th which was very useful. Do you have a similiar list in PDF for the SP500 dividend aristocrats? I would be grateful if you can please post such a list as well. (And my appoligies if it is already there and I am missing it.) Thanks again to both of you for your services. ”

Eoin Treacy's view Thank you for your kind words and this question which others may also have an interest in. The Dividend Aristocrat & Autonomy Tables section of the Subscriber's Forum has pdfs for the constituents of the various S&P dividend aristocrat indices covering the S&P 500, S&P Europe 350, Canada , and Asia . It also includes a pdf for the constituents of our Autonomies.

The most recent pdf for the S&P500 dividend aristocrats is from August 2011 when the Index had 42 constituents and the average yield was 3.06%. Since then the Index lost one constituent and gained 10 while the average yield is now 2.74%. Here is an updated pdf including all of the new members.

The Index found support shortly after I created the August 2011 pdf, following a fairly steep pullback and has trended higher over the intervening period. While somewhat overextended relative to the 200-day MA, a sustained move below it would be required to question the consistency of the medium-term uptrend. At present, the risk of a reversion towards that mean is increasing.

On clicking through the constituents of the Index a clear process of mean reversion is evident among a considerable number, while some of the better performers appear to be susceptible to mean reversion. Abbot Laboratories (3.08%) and McGraw Hill (1.86%) posted downside weekly key reversals over the last week, suggesting at least a short-term peak and potentially one of medium-term significance.

Chubb offers a good example of a share which has been trending consistently, yields 2.02% and has become temporarily overextended relative to the 200-day MA. It is becoming increasingly susceptible to a reversion towards the mean.

Sherwin Williams (1.03%) has held a rivetingly consistently progression of higher reaction lows but is becoming increasingly overextended relative to the 200-day MA. A break in the sequence of higher lows would signal a reversion towards the mean is underway.

Clorox (3.39%) is representative of the wider trend in consumer goods and posted a new all time high earlier this month. It has held a progression of higher major reaction lows since 2009 and a sustained move below $70 would be required to question medium-term uptrend consistency.

The addition of two asset management companies to the Index is notable not least because of the commonality evident across the sector globally. A number of the UK 's asset managers are also notable for this outperformance (Also see Comment of the Day on September 26th). T.Rowe Price (2.06%) is testing its highs for the year and a sustained move below the MA, currently near $61, would be required to question potential for continued upside. Franklin Resources (2.4%) is testing last year's high and while susceptible to some consolidation, a sustained move below $120 would be required to question potential for a successful upward break.

Back to top