Q3 2012 Dividend Rate Increases $8.8 Billion, Says S&P Dow Jones Indices

$45 Billion Added Year-to-Date as Investors Search for Yield

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Oct 03, 2012, 11:29 ET

NEW YORK, Oct. 3, 2012 /PRNewswire/ -- S&P Dow Jones Indices announced today that dividend net increases (increases less decreases) were $8.8 billion in the third quarter of 2012, setting what is believed to be a new record dividend quarterly payout in aggregate dollars for U.S. domestic listed common stock issues. S&P Dow Jones Indices reported 439 dividend increases during the third quarter of this year, a 25.4% gain over the 350 increases reported during the third quarter of 2011. Fifty-three companies, of the approximately 10,000 U.S. traded issues, decreased their dividend in the third quarter of 2012 compared to 23 issues this time last year.

"Dividends continue to have a great year, with actual cash payments increasing over 19% and the forward indicated dividend rate reaching a new all-time high," says Howard Silverblatt, Senior Index Analyst at S&P Dow Jones Indices. "Payout rates, which historically average 52%, remain near their lows at 34%. At this point, we expect to see double-digit growth in actual dividend payments for the fourth quarter of 2012 and a potential double-double gain in 2013 – depending on Washington."

The percentage of non-S&P 500 common issues (ASE, NYSE, NASD) paying a dividend again increased, to 43.4% in the third quarter from 42.7% in the second quarter, 41.7% in the first quarter and 41.4% at the end of the fourth quarter of 2011. Silverblatt also determined that yields for paying issues decreased to 2.66% at the end of the third quarter from 2.77% at the end of the second quarter.

"The yield decline was the result of a strong third quarter equity market," explains Silverblatt. "Yields remain relatively high when compared to competing income producers such as bonds, treasuries or CDs."

Additionally, Silverblatt reports that individual investors will have saved $358 billion on qualified dividend tax cuts from 2003 through the 2012 expiration date. "At this point taxes are a major concern for dividends. Under current legislation, taxes on dividends to individuals almost triples in 2013, going from 15% to 43.4%. From a planning perspective, this will force corporations to examine their return to shareholders policy, potentially pull back on dividend increases, and increase share buybacks. From an individual investor's prospective, the risk-return ratio shifts significantly since an investor would now be keeping less than 57 cents on the dollar compared to the current 85 cents," adds Silverblatt.

Looking ahead, Silverblatt is seeing many positive signs for dividends, including earnings coverage and cash assets. "Investors are seeking income and companies are increasing their aggregate payout," adds Silverblatt. "However, while companies are paying out record amounts, they are not being generous or even distributing near their historical payout rate. It's not a matter of companies being cheap. It's a matter of them being nervous about the economy and their resources, much like most of us."

To download S&P Indices Dividend Report, please visit the following web address: http://us.spindices.com/resource-center/thought-leadership/market-commentary/ and click on "S&P Dividend Report". For more information about S&P Indices, please visit www.spindices.com.

YEAR	POSITIVE	NEGATIVE	DIVIDEND
	DIVIDEND	DIVIDEND	BREADTH
	ACTIONS	ACTIONS

Q3 2012	439	53	8.28
Q3 2011	350	23	15.22
Q3 2010	299	35	8.54
Q3 2009	191	113	1.69
Q3 2008	346	138	2.51
Q3 2007	439	21	20.90

9 Mo Sep,'12	1,621	121	13.40
9 Mo Sep,'11	1,304	74	17.62
9 Mo Sep,'10	1,033	117	8.83
9 Mo Sep,'09	707	730	0.97
9 Mo Sep,'08	1,399	318	4.40
9 Mo Sep,'07	1,721	58	29.67


12 Mo Sep,'12	2,270	148	15.34
12 Mo Sep,'11	2,000	102	19.61
12 Mo Sep'10	1,517	191	7.94
12 Mo Sep,'09	1,182	1,018	1.16
12 Mo Sep,'08	2,191	370	5.92
12 Mo Sep,'07	2,552	89	28.67

2011	1,953	101	19.34
2010	1,729	145	11.92
2009	1,191	804	1.48
2008	1,874	606	3.09
2007	2,513	110	22.85
2006	2,617	87	30.08
2005	2,518	84	29.98
2004	2,298	62	37.06
2003	2,162	104	20.79
2002	1,756	135	13.01
2001	1,668	205	8.14
2000	1,886	137	13.77
1999	2,125	144	14.76
Source: S&P Dow Jones Indices

U.S. DOMESTIC COMMON MARKET (ASE, NYSE, NGM, NNM, NSC)
$ CHANGE-MIL	INCREASES	INITIALS	DECREASES	SUSPENSIONS
Q3 2009	$3,687	$719	-$1,040	-$401
Q3 2010	$6,065	$0	-$951	$0
Q3 2011	$7,064	$3,227	-$669	-$9
Q3 2012	$7,976	$2,097	-$1,299	-$12

	ACTIONS**	CHANGE	POSITIVE	NEGATIVE
Q3 2009	$5,847	$2,966	$4,407	-$1,441
Q3 2010	$7,017	$5,114	$6,065	-$951
Q3 2011	$10,969	$9,613	$10,291	-$678
Q3 2012	$11,383	$8,762	$10,073	-$1,310
**Absolute changes



U.S. DOMESTIC COMMON MARKET (ASE, NYSE, NGM, NNM, NSC)
$ CHANGE-MIL	INCREASES	INITIALS	DECREASES	SUSPENSIONS
9 MO SEP,'09	$8,943	$2,324	-$52,969	-$3,966
9 MO SEP,'10	$17,958	$2,517	-$1,751	-$227
9 MO SEP,'11	$34,681	$8,032	-$2,143	-$912
9 MO SEP,'12	$32,752	$16,084	-$3,193	-$666

	ACTIONS**	CHANGE	POSITIVE	NEGATIVE
9 MO SEP,'09	$68,202	-$45,668	$11,267	-$56,935
9 MO SEP,'10	$22,454	$18,497	$20,476	-$1,978
9 MO SEP,'11	$45,769	$39,658	$42,713	-$3,056
9 MO SEP,'12	$52,694	$44,977	$48,836	-$3,859
**Absolute changes



U.S. DOMESTIC COMMON MARKET (ASE, NYSE, NGM, NNM, NSC)
$ CHANGE-MIL	INCREASES	INITIALS	DECREASES	SUSPENSIONS
12 MO SEP,'10	$21,090	$3,760	-$2,687	-$364
12 MO SEP,'11	$42,673	$8,941	-$2,930	-$983
12 MO SEP,'12	$42,035	$17,748	-$3,565	-$675

	ACTIONS**	CHANGE	POSITIVE	NEGATIVE
12 MO SEP,'10	$27,901	$21,799	$24,850	-$3,051
12 MO SEP,'11	$55,527	$47,700	$51,614	-$3,913
12 MO SEP,'12	$64,024	$55,543	$59,783	-$4,241
**Absolute changes

S&P Dow Jones Indices
U.S. domestic public common stock
Values in $ billions, includes 2012 estimate

	TOTAL	SAVINGS BASED
	DIVIDEND	ON DIRECT
	PAYMENTS	QUALIFIED OWNERSHIP

2003-2012
S&P 500	$2,180.60	$183.46
Non-500	$1,496.80	$174.90
Total	$3,677.41	$358.36

The above estimates assume levels of direct S&P 500 ownership and dividend qualifications based on historical data. The assumptions for non-S&P 500 are based on broader indicators and not as well documented.

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SOURCE S&P Dow Jones Indices