Dividends of members of the world’s most important stock index, the US Standard & Poor’s 500 (S&P-500), rose to a record high of $18.32 in the last quarter of 2023. quarterly payments are common in the US.
The value is derived by adding up the proportional distributions of the index stocks and viewing the index as a single stock. Compared to the previous year, this is a decent increase of 5.7 percent.
Dividend yields are falling because prices are rising even faster than distributions
However, the average dividend yield continues to decline (see chart). After rising to 3.86 percent in 2008, it recently fell to 1.35 percent. The long-term average is 1.84 percent. The decline in earnings is because S&P stock prices have risen even faster than their distributions.
Side effect of trend. The percentage of S&P500 index members with dividend yields higher than the ten-year US Treasury yield has fallen sharply. After a good 75 percent in 2020, it’s currently just ten percent.
Ten percent of stocks that clearly outperformed Treasuries included tobacco company Altria, up an impressive 8.5 percent, drugstore chain Walgreens Boots Alliance, up 7.6 percent, and the telecommunications company. AT&T: by 7.5 percent.