February 2011 Dividend Stock Report

For the third straight month, the market was up again to reach another multi-year high with statistics showing an 86.7% increase in the Dow when comparing February 28, 2011 numbers to those reported during the last market crash on March 9, 2009. If the January barometer holds true for the rest of 2011 like it did for February, this could be a good year for investors. With unemployment claims down and new jobs rising, 2011 might be the start of a true recovery for many Americans as long as the unrest in the Middle East and the resulting fuel prices don’t cause any lasting problems.

All Three Major Categories Were Up for February

February was a great month for all three major stock categories. For those of you who follow the Dow Jones Industrial Average, this set of stocks increased to 12,226 points compared to January’s 11,891 ending number. Also up for the month, the NASDAQ Composite Index also rose to 2782 points, an improvement over last month’s 2700 points. Last, but not least, the Standard and Poor’s 500 Index had a showing of 1327 points at the end of February, an increase over January’s 1286 points.

The Unsettled Middle East

Just as the protests in Egypt wound down, the trouble started in Libya. Although this development caused a slight dip in the stock market followed by an immediate correction, the steadily rising fuel prices are forecasted to eventually drive up consumer prices if left unchecked. If you haven’t had a chance to follow much of the story on the news, oil prices went up sharply on Libyan supplies as shipments were halted. Once the rebels took control of Tripoli and trading resumed, prices slipped a little. However, US drivers aren’t seeing a bit of relief at the pumps.

February saw Personal Income and Personal Spending Rise

According to the Bureau of Economic Analysis, personal income rose more than the expected 0.3% increase to a full 1%. This is the first significant increase in personal income since the recession began a few years ago, and, hopefully, a continuing trend. It appears that companies that can afford to do so are lifting their salary freezes, a good sign that more aggressive hiring may be seen in the near future.

Although personal spending also rose by a healthy 0.2%, this number fell far short of the 0.4% that the experts forecasted. As an example of the manufacturing sector’s performance, the Chicago Purchasing Managers Index increased to 71.2 from a January figure of 68.8. Economists were only expecting a 67.5 showing.

February’s Dividend Paying Stocks

So far this year, the Standard and Poor’s 500 Dividend Aristocrats are up. The total returns increased by 1.91% while the price returns rose by 1.48%. In looking at their performance over the past five years for both numbers, they were at 21.19% and 17.57% at the one-year point, 8.6% and 5.12% at the three-year point, and 6.19% and 3.05% at the five-year point. Let’s take a look at the top performers in this category as of the end of February, 2011:

• Archer-Daniels-Midland Co from the Consumer Staples sector trading at $36.62
• Exxon Mobil Corp from the Energy sector trading at $84.80
• Stanley Black & Decker from the Consumer Discretionary sector trading at $74.36
• Walgreens from the Consumer Staples sector trading at $42.72
• Dover Corp from the Industrials sector trading at $63.64
• Clorox from the Consumer Staples sector trading at $67.86
• PPG Industries Inc from the Materials sector trading at $87.74
• VF Corp from the Consumer Discretionary sector trading at $94.20
• Automatic Data Processing from the Information Technology sector trading at $49.40
• Hormel Foods Corp from the Consumer Staples sector trading at $27.07

All Industrial Sectors Were Up For February

Although January 2011 wasn’t a terrible start to the New Year, the picture is always brighter when all industrial sectors are up. February was such a month. The energy sector was the winner again in February with a 6.77% gain, while utilities barely made headway with a mere 0.76% gain. When you look at the one- and two-year numbers, the outlook is even rosier. All categories show gains, with a 20.17% increase for the past 12 months and an 80.55% increase for the past 24 months. The following list details February, 2011 price return changes compared to January, 2011 by industry along with the one-year figures:

• Energy sector, up by 6.77% for February, up by 38.83% for the year
• Materials sector, up by 2.50% for February, up by 28.94% for the year
• Industrial sector, up by 2.04% for February, up by 27.58% for the year
• Consumer Discretionary Spending sector up by 5.78% for February, up by 29.20% for the year
• Consumer Staples sector, up by 2.40% for February, up by 9.79% for the year
• Health Care sector, up by 2.84% for February, up by 3.52% for the year
• Financial sector, up by 2.75% for February, up by 14.87% for the year
• Information Technology sector, up by 1.77% for February, up by 21.52% for the year
• Telecommunication sector, up by 2.33% for February, up by 23.46% for the year
• Utilities sector, up by 0.76% for February, up by 10.27% for the year
• Total, up by 3.20% for February, up by 20.17% for the year