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Chief Market Strategist
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  S&P 500 Index Companies Continue To Reward Shareholders
Posted Under: Broader Stock Market
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View from the Observation Deck 

  1. Today's blog post shows the surge in the amount of capital that S&P 500 Index companies have committed to stock dividends and stock buybacks since the quarter (Q1'09) in which the index bottomed in the last bear market.
  2. As indicated in the chart, using first quarter data points, the S&P 500 Index increased its combined outlays (dividends + buybacks) from $82.51 billion in Q1'09 to $257.65 in Q1'16 (preliminary), or an increase of 212.27%.
  3. For the 12-month period ended Q1'16 (not in chart), S&P 500 Index companies spent a combined $974.58 billion – a record amount, according to S&P Dow Jones Indices.
  4. As of Q1'16, preliminary data puts cash and equivalents held by the companies in the S&P Industrials (Old), defined as the S&P 500 minus Financials, Utilities and Transportation companies, at a record $1.34 trillion, according to S&P Dow Jones Indices.
  5. The S&P 500 Index closed 6/22/16 at 2,085.45, which was 2.13% below its all-time high of 2,130.82 established on 5/21/15, according to Bloomberg.
  6. Bloomberg's 2016 and 2017 earnings growth rate estimates for the S&P 500 Index were 8.82% and 13.42%, respectively, as of 6/23/16.
  7. The S&P 500 Index's estimated price-to-earnings (P/E) ratios for 2016 and 2017 were 17.90 and 15.79, respectively, as of 6/23/16, according to Bloomberg. It's average P/E over the past 50 years (thru 6/23/16) was 16.57.

This chart is for illustrative purposes only and not indicative of any actual investment. There can be no assurance that any of the projections cited will occur. The illustration excludes the effects of taxes and brokerage commissions or other expenses incurred when investing. Investors cannot invest directly in an index. The S&P 500 Index is a capitalization-weighted index comprised of 500 stocks used to measure large-cap U.S. stock market performance.

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Posted on Thursday, June 23, 2016 @ 1:04 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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