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Chief Market Strategist
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  S&P 500 Dividend Payout Has Fully Recovered From The Financial Crisis
Posted Under: Broader Stock Market • Stock Dividends
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View from the Observation Deck

  1. The chart above offers a nice before and after look at the recovery in the stock dividends distributed by the companies in the S&P 500.
  2. Quarterly dividend payouts did not surpass the $57.8 billion average (see chart) until Q2'11.
  3. The $67.3 billion in S&P 500 dividend payouts in Q2'12 eclipsed the $67.1 billion in Q4'07 (prior to crisis).
  4. Companies have the capital to raise their payouts. Non-financial firms in the S&P 500 hold a near-record $1.12 trillion in cash.
  5. The dividend payout-ratio (% of a dollar's worth of earnings paid out as a dividend) for these companies has been in the 30-35% range for a few years. Historically, the ratio has been closer to 50%.
  6. Demand for equity income remains robust. Lipper data shows that the Equity Income fund category reported net inflows totaling $20.3 billion year-to-date through August.
  7. That is by far the most for any U.S. Diversified Equity fund category. The entire universe of U.S. Diversified Equity funds reported net outflows totaling $27.6 billion.
Posted on Thursday, September 20, 2012 @ 3:27 PM • Post Link Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
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