S&P 500 Index’s Dividend Payout Still Trending Higher

View from the Observation Deck 

  1. S&P 500 Index companies paid out a record high $109.46 billion in cash dividends in Q4'17 (based on preliminary data).
  2. It marked the 5th consecutive quarter in which cash dividend distributions exceeded $100.00 billion. Over the past 41 quarters through Q4'17, the average quarterly dividend payout was $75.54 billion.
  3. The low point in the chart was the $47.21 billion paid out in Q3'09, the first quarter of the current economic expansion. From Q3'09 to Q4'17, the index's quarterly dividend payout increased by 131.86%.
  4. In 2017, S&P 500 Index companies paid out $419.77 billion in cash dividends (based on preliminary data), up 5.68% from the $397.21 billion distributed in 2016, according to S&P Dow Jones Indices.
  5. The steady rise in dividend distributions throughout the current economic recovery suggests that Corporate America is still on solid footing, in our opinion.
  6. As of 12/29/17, four sectors contributed 53.49% of the S&P 500 Index's dividend payout. Here was the breakdown: 16.24% (Information Technology); 13.18% (Financials); 12.39% (Health Care); and 11.68% (Consumer Staples), according to S&P Dow Jones Indices.
  7. S&P 500 Industrials (Old), defined as the S&P 500 minus Financials, Utilities and Transportation companies, had cash and equivalent holdings totaling an all-time high of $1.636 trillion in Q4'17, according to S&P Dow Jones Indices.
  8. Investors should be encouraged by the fact that companies are not only distributing billions of dollars more each quarter to shareholders via dividends, but appear to have the wherewithal to keep this trend going, in our opinion.
This chart is for illustrative purposes only and not indicative of any actual investment. 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 is a capitalization-weighted index comprised of 500 stocks (currently 505) used to measure large-cap U.S. stock market performance.

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Posted on Thursday, March 22, 2018 @ 1:58 PM

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.