3rd July 2013
Dividend payouts from US companies rose by $17.6 billion in the second quarter of 2013 for U.S. shares according to S&P Dow Jones Indices. Some 591 dividend increases were reported during the quarter, equating to a 17.0% gain over the 505 dividend increases reported during second quarter of 2012. Of the approximately 10,000 U.S. traded issues, 65 companies decreased dividends in Q2 2013 compared to 37 in Q2 2012.
In the six months in the year to date, S&P says there were 1,535 positive dividend events and 204 negative events – defined as either a decrease or suspension – compared to 1,182 positive events and 68 negative events during the 6 month period ending June 2012.
Howard Silverblatt, Senior Index Analyst at S&P Dow Jones Indices says: “Dividends continued to increase in the second quarter with actual cash payments increasing 15.5% and the forward indicated dividend setting another all-time high.”
“Payout rates, which historically average 52%, continue to remain near their lows at 36%. At this point, year-to-date dividend payments are up 13.9%, with 2013 easily expected to surpass the 2012 record dividend payment.”
The percentage of non-S&P 500 domestic common issues paying a dividend continued to increase, reaching 47.3% in Q2 2013 up from 46.1% in Q1 2013 and 43.8% in Q2 2012. The paying issues in the large-cap S&P 500 reached 82%, a level not seen since September 1999. All 30 members of the Dow Jones Industrial Average pay a dividend.
Silverblatt says the weighted dividend yield was 2.65% at the end of Q2, a slight tick up from the 2.61% at the end of Q1 and down from 2.80% at year-end. “The higher yield is statistically insignificant, as the increase in dividends kept pace with the increase in Q2 stock prices. Dividend yields continued to be competitive relative to other instruments such as corporate bonds, treasuries, and bank CDs,” he adds.
He continues to see positive indicators for dividends, including earnings coverage and record high cash levels. He says: “The dividend cycle continues on the upward track, with both investors and companies viewing them positively. Growth in the second half should be less than the first half due to the large December 2012 payout which was spurred by tax concerns.”