Signs of Life: S&P 500 Indicated Dividend Rate Turns Up
S&P 500 Dividend Payments Decline 8% in First Quarter
NEW YORK, March 19 /PRNewswire/ -- Standard & Poor's, the world's leading index provider, announced today that the S&P 500 indicated dividend rate has turned up, registering net positive announcements of $4.4 billion in expected dividend payments -- the largest increase since the $6.7 billion that was registered in the fourth quarter of 2007, and in sharp contrast to the first quarter of last year which saw companies decrease their forward rate by a record $38.7 billion.
In 2009, S&P 500 companies paid out $196 billion in cash dividends, a massive $52 billion decline from the $248 billion paid in 2008. The declining payments continued into the first quarter of 2010, which are expected to decline 8%, leaving investors another $2.8 billion short in dividend payments.
Quarter-to-date, 75 S&P 500 issues have increased their dividend rates with two decreasing. This compares favorably to the first quarter of 2009, which was the worst quarter for dividends in history (55 increases and 46 decreases). More revealing is that during the current period, the declared dividend changes net out to be a $4.4 billion annual gain in forward payments, compared to last year's $38.7 billion declared reduction in payments.
"Of significance is that seven issues in four different sectors were confident enough in their future earnings ability to initiate a dividend this quarter, which speaks to the recovery," says Howard Silverblatt, Senior Index Analyst at S&P Indices. "April will be a critical month for dividends, with several large dividend payers having a history of declaring a dividend rate increase during the month."
Four issues, Exxon Mobil (which is the second largest dividend payer, paying $8.0 billion annually), International Business Machines (#17 with $2.9 billion), Johnson & Johnson (#5 with $5.4 billion), and Procter & Gamble (#7 with $5.1 billion), represent 10.8% of the S&P 500 total payments, and, to some degree, "are up for renewal". Exxon, Johnson & Johnson, and P&G are all S&P DividendAristocrats (www.dividendaristocrats.standardandpoors.com), which means that they have increased their dividend rates for at least 25 years in a row, while IBM has increased 13 years in a row.
"Investors will put an increasing emphasis on dividends for both current income and longer-term capital appreciation. This additional emphasis will add pressure to non-paying dividend issues with sufficient and stable enough resources to initiate payments," concludes Silverblatt.
Additional dividend research from Standard & Poor's can be found by visiting: www.marketattributes.standardandpoors.com and clicking on "Dividends".
S&P 500 HISTORICAL APRIL DIVIDEND RATE CHANGE ISSUES:
Indicated Percentage New Old
Dividend Change in Indicated Indicated
Rate Indicated Dividend Dividend
Change in Dividend Rate Per Rate Per
YEAR COMPANY SECTOR Millions Rate Share Share
2007 Exxon Mobil Energy $656 9.4% $1.40 $1.28
2008* Exxon Mobil Energy $1,039 14.3% $1.60 $1.40
2009* Exxon Mobil Energy $395 5.0% $1.68 $1.60
2007 Intl Bus. Information
Machines Technology $551 33.3% $1.60 $1.20
2008 Intl Bus. Information
Machines Technology $542 25.0% $2.00 $1.60
2009 Intl Bus. Information
Machines Technology $268 10.0% $2.20 $2.00
2007* Johnson &
Johnson Health Care $458 10.7% $1.66 $1.50
2008* Johnson &
Johnson Health Care $503 10.8% $1.84 $1.66
2009* Johnson &
Johnson Health Care $332 6.5% $1.96 $1.84
2007* Procter &
Gamble Consumer
Staples $497 12.9% $1.40 $1.24
2008* Procter &
Gamble Consumer
Staples $611 14.3% $1.60 $1.40
2009* Procter &
Gamble Consumer
Staples $469 10.0% $1.76 $1.60
* DividendAristocrat
YEAR ACTIONS BREADTH* POSITIVE NEGATIVE
ISSUES ACTIONS ACTIONS
Q1 2009 101 1.20 55 46
2010 YTD 77 38 75 2
$CHANGE-MIL ACTIONS** CHANGE POSITIVE NEGATIVE
Q1 2009 $45,276 -$38,748 $3,264 -$42,012
2010 YTD $4,908 $4,400 $4,654 -$254
YEAR INCREASES INITIALS DECREASES SUSPENSIONS
ISSUES
Q1 2009 54 1 40 6
2010 YTD 68 7 1 1
$CHANGE-MIL INCREASES INITIALS DECREASES SUSPENSIONS
Q1 2009 $2,255 $1,009 -$41,103 -$910
2010 YTD $3,433 $1,221 -$226 -$28
* Breadth: (increases + initials) /(decreases + suspensions)
** Absolute changes
S&P 500 SECTOR DIVIDEND DATA, BASED ON INDICATED DIVIDEND RATE:
SECTOR CONTRIB CONTRIB CONTRIB
2008 2009 3/18/10
Consumer Discretionary 6.44% 7.10% 7.69%
Consumer Staples 13.26% 17.29% 17.71%
Energy 9.87% 12.09% 11.72%
Financials 20.48% 9.04% 8.94%
Health Care 12.20% 13.17% 13.02%
Industrials 13.86% 11.88% 11.61%
Information Technology 6.97% 9.07% 9.10%
Materials 3.40% 3.26% 3.25%
Telecommunication Services 7.17% 8.99% 8.81%
Utilities 6.34% 8.11% 8.14%
S&P 500 100.00% 100.00% 100.00%
SECTOR YIELD YIELD YIELD
2008 2009 3/18/10
Consumer Discretionary 2.29% 1.44% 1.44%
Consumer Staples 3.07% 2.96% 2.94%
Energy 2.21% 2.05% 2.00%
Financials 4.44% 1.22% 1.03%
Health Care 2.46% 2.03% 1.99%
Industrials 3.73% 2.26% 2.09%
Information Technology 1.36% 0.89% 0.90%
Materials 3.46% 1.76% 1.76%
Telecommunication Services 5.57% 5.53% 5.88%
Utilities 4.51% 4.26% 4.38%
S&P 500 2.97% 1.95% 1.88%
SECTOR PAYING PAYING PAYING
ISSUES ISSUES ISSUES
2008 2009 3/18/10
Consumer Discretionary 57 53 56
Consumer Staples 37 39 38
Energy 34 33 33
Financials 71 66 67
Health Care 25 22 22
Industrials 55 54 52
Information Technology 29 29 31
Materials 26 28 28
Telecommunication Services 7 6 6
Utilities 31 33 34
S&P 500 372 363 367
About S&P Indices
S&P Indices, the world's leading index provider, maintains a wide variety of investable and benchmark indices to meet an array of investor needs. Over $1 trillion is directly indexed to Standard & Poor's family of indices, which includes the S&P 500, the world's most followed stock market index, the S&P Global 1200, a composite index comprised of seven regional and country headline indices, the S&P Global BMI, an index with approximately 11,000 constituents, and the S&P GSCI, the industry's most closely watched commodities index. For more information, please visit www.standardandpoors.com/indices.
About Standard & Poor's
Standard & Poor's, a subsidiary of The McGraw-Hill Companies (NYSE: MHP), is the world's foremost provider of independent credit ratings, indices, risk evaluation, investment research and data. With offices in 23 countries and markets, Standard & Poor's is an essential part of the world's financial infrastructure and has played a leading role for 150 years in providing investors with the independent benchmarks they need to feel more confident about their investment and financial decisions. For more information, visit http://www.standardandpoors.com
SOURCE Standard & Poor's
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