The New Dividend Index

There's a new index in town: Last week, S&P Dow Jones launched the S&P MidCap 400 Dividend Aristocrats. The companies on this index are mid-cap stocks that have increased their dividend payouts for at least 15 consecutive years.

The idea behind these dividend payers isn't that they'll offer much higher returns than other stocks. Over the past five years, the stocks in the Dividend Aristocrats have returned 15.6 percent, while the overall S&P MidCap 400 stocks have returned 17.0 percent.

The big selling point for these stocks, though, is that they smooth out returns. Dividend-paying stocks tend not to do as poorly during down markets, when their payouts counteract reductions in share price. In 2011, for example, the S&P 400 overall lost 1.7 percent  - but the Dividend Aristocrats gained 3.7 percent.