Dividends Up 15%

Dividends continue to be popular. During the second quarter, the S&P 500 paid out $7.49 (adjusted to the index) in dividends. That’s a 14.9% increase over last year. That’s a payout ratio of less than 30% so it’s hardly stretching companies at all.

Here’s a look at the S&P 500 (in blue, left scale) while its trailing dividends (in black, right scale). The two lines are scaled at a ratio of 50-to-1 so anytime the lines cross, the dividend yield is exactly 2%.

I think it’s fascinating how closely the S&P 500 has tracked 50 times its dividend over the last 10 years (except during the financial crises).

Posted by on July 2nd, 2012 at 8:18 am


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