Surprise! Dividends Climb Even as Stock Values Level Off

In an ironic twist, just as the market is experiencing tumult for the first time a decade, large companies are not only boosting the amount of the dividends payable to stockholders but are increasing the payout as well.

February is the busiest time of the year for dividend announcements as companies disclose their annual results and reward shareholders before their annual meetings.

And it has been a good year for shareholders. One-fifth of the companies on the S&P 500 have boosted their dividends this year and none have cut or reduced their payouts.

Shares in companies whose current yield has increased from the previous year include energy firms, consumer staples and healthcare corporations.

With corporate earnings projected to increase by 17% for the first quarter, payouts may increase further still.

These bountiful payout ratios undoubtedly have helped fuel the market’s sustained and historically unprecedented rise.

Not only did the expected payouts materialize, some companies increased the payouts on dividends previously distributed and the hikes were larger than anticipated.

An added bonus for shareholders is that many companies are willing to pass through to them additional earnings generated due to the new tax laws.

Four companies in the S&P 500 have doubled their dividends this year, the sum of which equals all of the quarterly dividends paid out last year.

However, there is a twist: just as dividend yields are rising, stocks in general are becoming less attractive due to alternative investment vehicles that now provide better returns.

Bond concerns

One ominous sign is that for the first time since 2008 the yield on the two-year Treasury note exceeded the yield from dividends on the S&P 500.

Additionally, the new climate of market volatility has kept some investors who previously would have paid for the handsome current dividend yields on the sidelines.

The direction of interest rates to some degree is influenced by the monthly jobs report published by the Bureau of Labor Statistics.

If new jobs are created and wages are rising, the Federal Reserve could increase rates to keep inflation from exceeding its present target of 2%.

Should rate hikes continue, income-oriented investors seeking to maximize yield for the first time in many years. They may in turn find lower-risk bonds more attractive than shares of companies, even those with consistently high dividend-payout ratios.

Bulletproof Your Portfolio Now!

A smart investor should be prepared for anything. That’s why David Frazier created the Bulletproof Wealth Report. This comprehensive investment service is everything you will need to survive and thrive in the looming meltdown. In other words: It’s how anyone can make their portfolio bulletproof. It’s a mix of fast-growing, leading companies that are the engine of American prosperity. To that he adds a healthy dose of “insurance policies” i.e. stocks and funds that benefit when the next recession strikes. The future favors the prepared. You can be prepared. Not only that — you can profit.
Bulletproof My Portfolio!

Cryptocurrency Will Shine Through the Coming Chaos

While the U.S. spends and spends and spends its way into oblivion, the eventual result will be inflation. Serious inflation. The dollar will crash, gold will shoot higher and Bitcoin, well, it can only become more scarce and more valuable. There’s a natural ceiling to the number of Bitcoins that will exist — ever. By design, there can only be 21 million of them. Soon, the ceiling will be hit. Now is the moment to get into cryptocurrency. There’s a been a rise of late, but prices are consolidating, setting up for the next leap higher. Grab Keene Little's widely followed cryptocurrency newsletter, Crypto Wealth Protocol completely risk free.
Yes! Send Me A Free Issue

Leave a Reply

*