Tags: Dividend | Payout | High

Dividend Payout Expected to Hit New All-Time High

Tuesday, 14 February 2012 08:18 AM

The payout rate for dividends for Standard & Poor's 500 index companies has managed to rise 31.8 percent since its 2009 bottom, but still lags the 2008 level by about 2.5 percent, according to S&P's data.

“I expect the index will retake that high later this year and hit a new record,” Howard Silverblatt, senior index analyst for Standard & Poor’s indexes, told CNBC. “I’m looking for $263 billion by the time this year is over.”

Financials, which were responsible for more than 31 percent of the S&P 500 payouts in 2007, provided just 11.8 percent of the 2011 payout.

Consumer staples in 2011 were the biggest contributor, providing 15.5 percent of the total S&P 500 payout, while technology provided a surprising 10.4 percent of the total last year, according to Silverblatt.

So far this year, 63 companies in the S&P 500 have announced dividend actions, with 61 increasing their payout rate and two companies initiating dividends, according to Standard & Poor’s.

“Dividend reductions are event driven, but increases by companies that increase every year, or every couple of years, traditionally go at the beginning of the year,” said Silverblatt.

According to Forbes magazine, from 1973 to 2010, growth dividend stocks returned, on average, 9.39 percent versus just 1.8 percent for non-dividend payers. Companies who cut their dividend–the equivalent of deciding to limit exercise and eat more–retuned a negative 0.81 percent.

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Tuesday, 14 February 2012 08:18 AM
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