U.S. Companies Slow Pace of Dividend Net Increases

NEW YORK, April 1, 2015 /PRNewswire/ -- S&P Dow Jones Indices announced today that dividend net increases (increases less decreases) rose $12.6 billion during the first quarter of 2015 for U.S. domestic common stock, down from the $17.9 billion increase during the first quarter of 2014. The dollar amount decline equates to a 30.0% year-over-year slowdown in dividend increases. For the 12 months ending March 2015, dividend net increases fell 17.7% to $49.6 billion compared to an increase of $60.1 billion for the corresponding period in 2014.

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Additional findings from S&P Dow Jones Indices' quarterly analysis of the dividend activity of approximately 10,000 U.S. traded issues include:

Dividend Increases (defined as an increase in dividend payments)

• For the 12-month period ending March 2015, 3226 issues increased their payments from the 3029 issues that increased their payments during the prior 12-month period, a 6.5% increase.
• 996 dividend increases were reported during the first quarter of 2015 compared to 1,078 increases reported during the first quarter of 2014, a 7.6% decrease.

Dividend Decreases (defined as either a decrease or suspension)

• 172 companies decreased dividends in Q1 2015 compared to 67 in Q4 2014 and 102 in Q4 2013.
• For 12-month period ending March 2015, 361 companies decreased their dividend payments compared to 262 decreases in the prior 12-month period.

Non-S&P 500 domestic common issues (ASE, NYSE, NASD) paying a dividend

• The percentage of non-S&P 500 domestic common issues (ASE, NYSE, NASD) paying a dividend was up slightly to 48.6% during Q1 2015 compared to the 48.5% rate in Q4 2014, and up compared to the 47.0% at the end of the first quarter last year.
• The weighted dividend yield increased to 2.51% from last quarter's 2.45%, and the 2.48% seen at the end of the first quarter of 2014.

"Unfortunately, our concern expressed last quarter with respect to energy and energy related dividends played out," says Howard Silverblatt, Senior Index Analyst at S&P Dow Jones Indices. "Half of the cuts for the quarter were in energy or materials, which amounted to over $3.5 billion or 80% of the cuts as lower oil and commodity prices depressed earnings and cash-flow. While prices have stabilized recently, confidence has been reduced with companies cutting back on expenditures, including dividends."

Large-, Mid-, and Small-Cap Dividends
According to Silverblatt: "The good news for dividends is that more small-cap issues are initiating a cash dividend policy to the tune of a 10.5% increase in payers from the end of 2013. While the yield between indices based on size is significant (large, mid and small), on an issue basis size was not a significant differentiator, with small-cap payers paying on par with large-cap ones." 

Within the large-cap S&P 500^®, 420 issues (83.7%) currently pay a dividend. All 30 members of the Dow Jones Industrial Average^® pay a dividend.

Silverblatt found that 69.3% and 54.2% of issues within the S&P MidCap 400 and S&P SmallCap 600, respectively, pay dividends. These figures are higher than the 68.0% and 52.7% which paid at the end of Q4 2014 and the Q1 2014 levels of 66.3% and 49.5%. 

Yields at the index level continued to vary greatly, with large-caps hitting 2.04%, mid-caps at 1.47% and small-caps landing at 1.33%. For paying issues, the yields across market-size classifications were very compatible, with large-caps coming in at 2.38%, mid-caps at 2.10% and small-caps at 2.20%. 

2015
"At this point the overall 2015 dividend picture is still very positive, as increases remain strong, even as energy remains concerning," adds Silverblatt. "Given the current policies and payouts, 2015 is well on its way to another record year; however, extending the four-year run of double-digit growth in actual payments will take a bit more energy."

For more information about S&P Dow Jones Indices, please visit www.spdji.com.

About S&P Dow Jones Indices
S&P Dow Jones Indices LLC, a part of McGraw Hill Financial, is the world's largest, global resource for index-based concepts, data and research. Home to iconic financial market indicators, such as the S&P 500® and the Dow Jones Industrial Average^®, S&P Dow Jones Indices LLC has over 115 years of experience constructing innovative and transparent solutions that fulfill the needs of investors. More assets are invested in products based upon our indices than any other provider in the world. With over 1,000,000 indices covering a wide range of asset classes across the globe, S&P Dow Jones Indices LLC defines the way investors measure and trade the markets. To learn more about our company, please visit www.spdji.com. 

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SOURCE S&P Dow Jones Indices LLC

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