Sunday, August 26, 2012

Dividend Payers In S&P 500 Index Continue To Grow

Howard Silverblatt, Senior Index Analyst for S&P Dow Jones Indices, recently noted the number of dividend payers in the S&P 500 Index has grown to 402 companies. This number reaches a level last seen in 1999. For 2012, thirteen companies have initiated dividend payments to date.

From The Blog of HORAN Capital Advisors

According to Silverblatt the dollar dividend payment for S&P 500 companies is up 14.7% so far this year. Additionally, he notes, "We expect a record $275 billion in S&P 500 dividends for 2012, up from $241 billion in 2010. The former record was $248 billion in 2008." Lastly, S&P notes, "since 1926, reinvested dividends have accounted for about 41% of the total return of the S&P 500 Index." Certainly, dividends are an important factor for investors to consider when evaluating investment choices.

With the approaching fiscal cliff at the end of the year, which includes the expiration of the current tax policy put in place during the Bush administration, companies may begin paying special dividends prior to year end. The reason for this is the fact the tax rate on dividends is scheduled to increase from 15% to a rate equal to a tax payers ordinary income tax rate.

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