S&P 500 Dividends Now Exceed Pre-Crash Levels And Dividend Payers Are Helping The Index

Standard and Poor's publishes dividend data for the S&P 500 and also performance data for dividend payers and non-payers separately.

The world economy is wobbly, but large-cap US stocks are growing, earning and sharing earnings growth with owners.

Even with the dividend cuts that arose from the financial sector problems in the 2008 crash, dividends have been much more dependable as a source of funds than share prices for those who must harvest cash from their portfolios.

Here is what S&P put out as of April 30, 2012.

Figure 1: Dividends Now Exceed Pre-Crash Levels:

Figure 2: Graphical View of Dividend Amounts:

(click to enlarge)

Bank and financial stocks in particular took a large bite out of the yield for the S&P 500 in 2009 due to voluntary and Treasury mandated dividend cuts or suspensions. Those dividends are not yet fully restored, but the index has overall managed to rise, and now exceeds the pre-crash dividend payment levels.

The 2008 dividend payment amount exceeded the 2007 amount because of the lag time in cutting dividends due to the crash. Pre-announced dividends were paid even with a diving stock market, and cuts did not all take place instantly or at the same time.

The average indicated yield of dividend payers is 2.49% and the weighted indicated yield for the index is 2.21%.

Figure 3: Dividend Payers Total Return vs Non-Payers:

When stock markets are rising, dividend stocks tend to lag, and when markets are falling dividend stocks tend to lead, as illustrated by the short period covered in Figure 3. During panics, correlations approach 1.00, and stocks fall undifferentiated.

Some of the key proxies for the S&P 500 index are: SPY, IVV and VFINX.

Disclosure: QVM has positions in SPY as of the creation date of this article (May 19, 2012).

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