Constituents of the defensive Dividend Aristocrat Index have experienced some meaningful single-day sell-offs recently.
This research aimed at putting these sell-offs into a broader context over this business cycle.
Given that these businesses have had the financial capacity to increase shareholder payouts over multiple cycles, have these stocks bounced back after their sharpest one-day declines?
When 3M (MMM) released poor earnings and lowered forward guidance on April 25th, the stock responded with a 13% single-day decline, its largest drop since the Black Monday stock market crash in October 1987. The former Minnesota Manufacturing & Mining Company has paid increasing dividends for sixty straight years, one of the longest histories among the Dividend Aristocrats. As long-time readers know, the Dividend Aristocrats are a group of companies that have paid increasing dividends to shareholder for at least a quarter of a century. This group has collectively strongly outperformed the market with lower variability and lower drawdowns. The ProShares S&P 500 Dividend Aristocrats ETF (NOBL) is an exchange-traded fund that owns the constituents of the S&P 500 that have achieved this stellar dividend growth history.