Scary Month or Irrational Superstition?
October is traditionally a scary month for investors. The Panic of 1907, the great market crash of 1929, and Black Monday of 1987, all occurred in October. In fact, October is the most volatile month for stocks with more 1% or larger swings in the S&P500 in the month than any other month. For these reasons, there is a perceived “October Effect” among stock investors who believe the month is a down months for stocks.
Historical evidence doesn’t support the perception that stocks trade lower in October. September has more down months than October. Indeed, October has marked the end of more bear markets than it has the beginning. However a psychological black cloud hangs over the month, particularly with older investors; younger investors don’t have the same perspective, and may only remember the Lehman Brothers collapse which occurred in mid-September 2008, not October. So the “October Effect” is fading.
If investors see the month negatively (regardless of reality) it may create some buying opportunities.
Dividend System™ OCTOBER SUMMARY
For the month of October, 2021, there are 436 dividend paying stocks in the Dividend Investing Universe (those stocks that have paid increasing dividends for a minimum of 7 years). Of these 436, only 109 are designated ‘Premier,’ the top ranking performers in each sector.
SECTOR LEADERBOARD
The top stocks in each sector are:
» Basic Materials: Sherwin-Williams Co (SHW) ~ Chemicals | 25.5% TR5y [-]
» Communication Services: Comcast Corp (CMCSA) ~ Media – Diversified | 12.5% TR5y
» Consumer Cyclical: Tractor Supply Co (TSCO) ~ Retail – Cyclical | 25.5% TR5y [+]
» Consumer Defensive: Costco Wholesale Corp (COST) ~ Retail – Defensive | 25.7% TR5y [+]
» Energy: Star Group LP (SGU) ~ Oil & Gas | 5.5% TR5y
» Financial Services: MarketAxess Holdings Inc (MKTX) ~ Capital Markets | 21.1% TR5y
» Healthcare: UnitedHealth Group Inc (UNH) ~ Healthcare Plans | 24% TR5y [-]
» Industrials: Cintas Corp (CTAS) ~ Business Services | 28.5% TR5y [-]
» Real Estate: Extra Space Storage Inc (EXR) ~ REITs | 18.5% TR5y
» Technology: Amphenol Corp (APH) ~ Hardware | 18.5% TR5y [-]
» Utilities: Chesapeake Utilities Corp (CPK) ~ Utilities – Regulated | 15.9% TR5y [-]
GROWTH LEADERS
Here are the top Growth Stocks, meeting our criteria, based on their data from the month of October, for each sector.
» Basic Materials: UFP Industries Inc (UFPI) ~ Forest Products | 16.4% TR5y
» Communication Services: Activision Blizzard Inc (ATVI) ~ Interactive Media | 12.3% TR5y [-]
» Consumer Cyclical: Tractor Supply Co (TSCO) ~ Retail – Cyclical | 25.5% TR5y [+]
» Consumer Defensive: Church & Dwight Co Inc (CHD) ~ Consumer Packaged Goods | 12.7% TR5y
» Financial Services: First Financial Bankshares Inc (FFIN) ~ Banks | 21.5% TR5y [-]
» Healthcare: Stryker Corp (SYK) ~ Medical Devices & Instruments | 18.7% TR5y [-]
» Industrials: CSX Corp (CSX) ~ Transportation | 25.2% TR5y
» Technology: Amphenol Corp (APH) ~ Hardware | 18.5% TR5y [-]
HIGH INCOME
Here are the top income producing stocks that meet our criteria, also for October’s data, for each sector.
» Consumer Cyclical: Packaging Corp of America (PKG) ~ Packaging & Containers | 13.5% TR5y [-]
» Consumer Defensive: Tyson Foods Inc (TSN) ~ Consumer Packaged Goods | 2.9% TR5y
» Energy: Star Group LP (SGU) ~ Oil & Gas | 5.5% TR5y
» Financial Services: Northern Trust Corp (NTRS) ~ Asset Management | 11.9% TR5y [-]
» Healthcare: PetMed Express Inc (PETS) ~ Healthcare Providers & Services | 9.5% TR5y [-]
» Industrials: Snap-on Inc (SNA) ~ Industrial Products | 8.5% TR5y [-]
» Real Estate: Extra Space Storage Inc (EXR) ~ REITs | 18.5% TR5y
» Technology: Texas Instruments Inc (TXN) ~ Semiconductors | 24.2% TR5y
» Utilities: Southwest Gas Holdings Inc (SWX) ~ Utilities – Regulated | 2.1% TR5y [-]
OVERALL SUGARY GOODNESS
These are the top 10 stocks as ranked through a combo of quality, growth, safety, and stability, but not by sector.
1: First American Financial Corp (FAF) ~ Insurance | 13.9% TR5y [-]
2: Fastenal Co (FAST) ~ Industrial Distribution | 21.9% TR5y [+]
3: Allstate Corp (ALL) ~ Insurance | 14.7% TR5y [-]
4: Snap-on Inc (SNA) ~ Industrial Products | 8.5% TR5y [-]
5: Union Pacific Corp (UNP) ~ Transportation | 16.9% TR5y [-]
6: Tyson Foods Inc (TSN) ~ Consumer Packaged Goods | 2.9% TR5y [-]
7: Extra Space Storage Inc (EXR) ~ REITs | 18.5% TR5y [-]
8: Northern Trust Corp (NTRS) ~ Asset Management | 11.9% TR5y [-]
9: PetMed Express Inc (PETS) ~ Healthcare Providers & Services | 9.5% TR5y [-]
10: Watsco Inc (WSO) ~ Industrial Distribution | 15.9% TR5y [-]
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TR5y is the average annual total return for a stock over preceding 5 years. ‘[+]’ indicates upward direction of 5y Total Return™ compared to 10y Total Return. ‘[-]’ indicates the Total Return trend is declining. If there are no brackets, the total return is inconsistent, with no clear growth trend.
Note: Some sectors don’t have many qualified stocks, such as ‘Communication Services’ and ‘Energy’, so you may see one or two stocks appear many times in our lists, and that’s simply because it’s one of the few to choose from. Further research is always prudent.