Chuck Saletta presents some compelling evidence that Washington Mutual (NYSE:WM) will be able to sustain its healthy dividend yield and ride out this storm. It's also normally considered a good sign for current shareholders when insiders are acquiring shares. However, the question that investors should be asking themselves is: "What is the likelihood that, going forward, WaMu will outperform the market?" The answer is: highly unlikely.

From a capital-appreciation standpoint, the company is on track to underperform the market for the fifth time in five years, as well as for seven out of the past 10 years:

Year

S&P 500

WM

YTD

9.07%

(21.39%)

2006

13.62%

2.36%

2005

3.00%

2.96%

2004

8.99%

5.38%

2003

26.38%

14.89%

2002

(23.37%)

6.34%

2001

(13.04%)

(5.00%)

2000

(10.14%)

110.22%

1999

19.53%

(32.70%)

1998

26.67%

(11.61%)

Data from Yahoo! Finance.

Looking at the chart, I would be more inclined to invest my money in an S&P 500 Index fund than in Washington Mutual. Then once we mix in the unpleasant reality that the company is amid a storm that's bringing about a towering rise in its loss provisions, it becomes even more apparent from a prospective outlook that even a 6.2% dividend yield will not be enough to compensate for the negative trend.

Even before the recent turbulence in the mortgage industry, Washington Mutual's stock price had remained relatively flat in 2007. Before the company released its second-quarter earnings report on July 18, the stock had already fallen 8.4% year to date. Now it's in an even deeper hole two and half months later.

I think it's going to take a little bit more than a couple of insiders deferring their directors' fees to convince the market that Washington Mutual is about to dig its way out of the ditch. With the Dow currently in record territory, there are plenty of areas of the market where money can be made. This area is not one of them.

Check out the other arguments in this duel, and then vote for a winner.

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Washington Mutual is a Motley Fool Income Investor recommendation.

Fool contributor Billy Fisher does not own shares of any of the companies mentioned. The Fool has a disclosure policy.