- S&P 500 companies are set to pay out more than $500 billion in dividends for the first time ever in 2020, data compiled by S&P Dow Jones Indices show.
- The all-time high continues the streak of record dividend payouts that began in 2012, according to S&P senior index analyst Howard Silverblatt.
- Only “a major event” could stop markets from hitting the record, Silverblatt wrote in a recent note.
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The all-time high continues the streak of record dividend payouts that began in 2012, the firm said. Markets have already advanced to record highs in the new year, and firms will likely boost their dividend payouts if the bull market persists through 2020, according to Howard Silverblatt, senior index analyst at S&P.
“The current 2020 outlook, absent any major event or negative Washington policy, has the 2020 payment potentially returning to double digits, last seen in 2015,” Silverblatt said, implying that such an expansion would translate to a number above $500 billion.
Last year saw dividend payments increase 6.4% to a record $485.4 billion, according to a Tuesday release from S&P. The fourth quarter of the year saw the index pay out $126.4 billion in dividends, compared to $119.8 billion in the year-ago period.
Dividends are usually held steady or raised by public firms, as cuts suggest weakening financial status. Executives often point to dividends as a promise to maximize shareholders’ returns.
“When we embarked upon the dividend in 2013, you may recall that we said we’re serious,” Paul Jacobson, Delta Air Lines‘ chief financial officer, said at a December 12 investor day.
He added: “This was a commitment through thick and thin to serially return capital to our shareholders. And all we’ve done is increase that dividend each and every year such that we currently sit at about $1 billion a year of dividend flowing back.”
While the S&P 500’s dividend payouts have grown year after year, the index’s 29% surge through 2019 pushed its dividend yield — the proportion of an asset’s dividend compared to its price — to 1.8% by the end of the year. The level marked the index’s lowest year-end dividend yield since 2006.
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