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

Back to top

RELATED LINKS
http://www.standardandpoors.com