Dividends Continue to Rise

I often hear market bears describe the current market as “a bubble.” What I find interesting is that if this is a bubble, it’s got to be one of the few bubbles where stock prices have generally lagged growth in both earnings and dividends.
S&P just reported that dividends for the S&P 500 grew by 11.5% over last year. They’re also projecting a 9.3% growth for next year. This means that in the last four years, dividends have grown by 60%.
The overall dividend rate is still very low—less than 2%. But don’t overestimate how quickly these payments can add up. Over the last five-and-a-half years, dividends have contributed about 10% to the overall return of the S&P 500. That’s around 1,300 Dow points.
S&P also added five new stocks to its list of Dividend Aristocrats. These are companies that have increased their dividend every year for the last 25 years. The stocks are Avery Dennison, Exxon Mobil, Integrys Energy, Pitney Bowes and our very own AFLAC (AFL).
Here’s a complete list of Dividend Aristocrats. There’s also an ETF for the Dividend Aristocrats, symbol SDY.

Posted by on December 28th, 2007 at 8:27 pm

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