Home Logon FTA Investment Managers Blog Subscribe About Us Contact Us

Search by Ticker, Keyword or CUSIP       
Blog Home
Bob Carey
Chief Market Strategist
X •  LinkedIn

  Let's Call It A Comeback
Posted Under: Stock Dividends
Supporting Image for Blog Post

View from the Observation Deck

  1. Today's blog post on bank dividends revisits the one we did last June (Click here). 
  2. The main difference between today's chart and last June's is that the estimated dividend payments for 2018-2019 have been raised, particularly the projection for 2019.  
  3. Since the biggest banking institutions in the U.S. were at the epicenter of the 2008-2009 financial crisis, investors should not be surprised that the recovery has been a bit of a slow grind to this point, in our opinion. 
  4. As indicated in the chart, the bottom in annual dividend distributions for the S&P 500 Banks Index was $1.34 in 2010. The recovery in dividend payments is now in its eighth year. Even if the $10.43 per share dividend for 2020 proves accurate, it would still stand 28.32% below 2007's payout.   
  5. As of the close of trading on 5/7/18, the S&P 500 Banks Index stood 19.42% below its all-time high set on 2/20/07, according to Bloomberg. 
  6. The outlook for earnings is encouraging. As of 5/4/18, Bloomberg's consensus earnings growth rate estimates for the S&P 500 Banks Index for 2018, 2019 and 2020 were 23.3%, 11.6% and 11.7%, respectively.
  7. The recovery in the banking sector remains a work in progress, and therein lies the opportunity for investors, in our opinion.  
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 and other expenses incurred when investing. Investors cannot invest directly in an index. The S&P 500 Banks Index is capitalization-weighted and comprised of 18 constituents.

Download a PDF of this post, please click here.
Posted on Tuesday, May 8, 2018 @ 1:22 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.
Search Posts
Market Commentary and Analysis
Market Commentary Video
Monthly Talking Points
Quarterly Newsletter
Market Observations
Subscribe To Receive Email

Some Insight Into The S&P 500 Index Dividend Payout
The Price Of Crude Oil Has Risen To An Interesting Level
Every Year Looks Volatile Compared To 2017
Consider The Potential Opportunity Costs Before You Sell In May And Go Away!
A Snapshot Of European Equities
Stock Buybacks Are Expected To Rise Markedly Thanks To Tax Reform
A Snapshot of Growth vs. Value Investing
Sector Performance Via Market Capitalization (Year-to-Date)
Some Perspective On The Performance Of The S&P 500 Index
The Current Stock Market Correction Is Behaving Like The Last One
Skip Navigation Links.
Search by Topic
Skip Navigation Links.

The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
Follow First Trust:  
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2024 All rights reserved.