If you're feeling blah about the S&P 500's odds for March, that's understandable. But it can still be a powerful month to grow wealth if you pick your spots.
Six stocks in the S&P 500 — like high-yield real estate plays Equinix and American Tower and utility Consolidated Edison — tend to be the surprising winners during a decidedly ho-hum month for most stocks, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.
All six stocks (see the table below) topped the S&P 500 in each of the past five months of March. Additionally, they've all gained 4% or more in the third month of the year going back to 2017.
Knowing it's still possible to find winning stocks in March is a comforting thought for S&P 500 investors put through the wringer in January and February. The S&P 500 is now down more than 8% this year so far. And it's been flirting with a correction, or worse, all year.
"It may be the shortest month of the year, but February had no shortage of major events driving market performance. Between earnings season, the FOMC and war in Ukraine, markets jerked around all over the place and ultimately finished the month lower," said Bespoke Investment Management. "For any bulls out there, they are more than happy to see February come to an end."
March Isn't A Great Month For Most S&P 500 Stocks
If rising inflation and tension with Russia weren't enough, S&P 500 investors must also contend with seasonality. In a nutshell, March isn't a great month for stocks. It's just not a bad one, either.
S&P 500 stocks, on average, rose 1.1% during the month of March going back to 1950, says "Stock Trader's Almanac." That ranks it exactly average, or sixth, out of all the months of the year for gains. Additionally, the month tends to be "rather turbulent," says the almanac.
Specifically, investors have suffered some mighty blows in the end of the first quarter in recent years. The S&P 500 rose in March 2021 by a healthy 4.2%. But it actually fell in two of the past five Marches. Some investors are still smarting from the 12.5% drop in the S&P 500 in March 2020. All told, the S&P 500 posted an average 1.8% loss in March going back to 2017.
But that doesn't mean you have to lose money in the month, too.
Equinix: The Kind Of S&P 500 Stock March Likes
Investors clearly like to play it a bit safe in March. Looking at the winners of the month in the past five years tells the story.
All six of the S&P 500-beating stocks up 4% or more in the month since 2017 are either in the real estate or utilities sectors. These are sectors investors gravitate to when they're nervous and looking for stability. To that end, four of these top six stocks yield north of 2%, while the S&P 500 is yielding just 1.6%.
Take Equinix, for instance. The company is a high-tech landlord to some of the world's top technology firms. It rents warehouses stuffed full of computer servers for companies running cloud-based services. Shares rose 6.8%, just in the month of March going back five years. That makes Equinix the top outperfomer in the S&P 500.
Last March, shares edged up more than 4.8%, topping the S&P 500's 4.2% gain. And in March 2020, when the S&P 500 plunged nearly 13%, shares of Equinix jumped 9%. And on top of all this outperformance, Equinix also yields 1.7%. Equinix shares are down 16.1% this year so far. But will March turn that around?
Big Dividends In March
Some March winners, though, pay much bigger yields. Consolidated Edison, a power provider in New York, yields an impressive 3.68%.
That's already roughly twice the yield of the S&P 500. And get this: It's a solid stock performer in the month, too. Shares jumped an average of 4.1% in March for the past five years. And it's a durable stock. It only fell 1% in March 2020, while the S&P 500 dropped by a double-digit percentage. It's also capable of rallies, too. Shares jumped 13.9% in March 2021, topping the S&P 500 by roughly three times.
Such safe havens are already in demand, and it's not even March yet. Shares of Consolidated Energy are up 0.5% this year.
And March is just around the corner.
Top S&P 500 Stocks In March
All topped the S&P 500 in the past five months of March by 4% or more
| Company | Symbol | Sector | Average price change in March | Dividend yield |
|---|---|---|---|---|
| Equinix | Real Estate | 6.8% | 1.73% | |
| SBA Communications | Real Estate | 6.8 | 0.76 | |
| American Tower | Real Estate | 5.7 | 2.38 | |
| Atmos Energy | Utilities | 4.5 | 2.49 | |
| Consolidated Edison | Utilities | 4.1 | 3.68 | |
| WEC Energy | Utilities | 4.1 | 3.20 | |
| S&P 500 | -1.8 | 1.45 |
