By Kate Gibson
While the S&P 500 Index's seven-month streak of gains came to a halt in October, the consumer staples sector continued higher, up for an eighth consecutive month for the best streak among the index's 10 industry groups.
More importantly for investors, consumer staples offered the greatest payback, contributing 17.5% of S&P 500 dividends, year-to-date.
"Over the past year and half, major institutions have cut their dividends to insure liquidity. Financials, that were over 30% of the S&P dividend income now account for 9%, with consumer staples being the dominate payer, accounting for 17.5%," said Howard Silverblatt, senior index analyst at Standard & Poor's.
A list compiled by Silverblatt of 52 companies that have tallied 25 consecutive years of increased cash payments to shareholders is heavily weighted with companies in the consumer staples sector, and include agribusiness giant Archer-Daniels-Midland Co. (ADM), which hiked its payout to shareholders in February, and is scheduled to release quarterly results early Tuesday.
Also, Clorox Co. (CLX), which increased its dividend in June, reported a bigger-than-expected quarterly profit Monday, citing the flu pandemic for strong sales of disinfecting products.
Beverage makers Coca-Cola Co. (KO) and PepsiCo Inc. (PEP) also ranked on Silverblatt's list, with the former boosting its dividend in February and the latter hiking its payout in May.
Discount retailers Walgreen Co. (WAG) and Wal-Mart Stores Inc. (WMT) also ranked on Silverblatt's list, with the latter on Monday saying it would cut prices on 100 toys for the holiday season. .
Health-care products company Kimberly-Clark Corp. (KMB) also maintained its place, along with grocery chain operator Supervalu Inc. (SVU).
Of the S&P's 10 sectors, only energy and consumer staples gained last month, with the former rising more than 3%, and the latter gaining just more than 1%.
"Companies that make stuff as opposed to sell stuff are doing better," Dan Greenhaus, chief economic strategist, Miller Tabak & Co., wrote in an early note.
Greenhaus adds that he expects that trend to moderate as the economy continues to stabilize and end demand reappears.
On Monday, material shares fronted Wall Street's gains, which initially came with a positive earnings surprise by Ford Motor Co. (F).
Sentiment was further lifted after economic reports offered upbeat readings on the housing and manufacturing activity. . .
After falling nearly 250 points on Friday, the Dow Jones Industrial Average (DJI) was lately up 85.32 points at 9,798.05. The S&P 500 Index (SPX) rose 7.6 points to 1,043.78, while the Nasdaq Composite Index (RIXF) climbed 10.3 points to 2,055.41.