The State of Dividends for U.S. Stocks

The State of Dividends for U.S. Stocks

Dividends for U.S. companies continue to be under pressure as fewer issues are increasing payments and those issues that do increase do so at a lower rate. Within the S&P 500®, the average dividend increase for Q2 2016 was +10.56%, down from +10.62% in Q1 2016 and +13.08% for all of 2015. The pace of dividend cuts continues to rise, as Q2 saw a substantial increase in cuts from mid and small-cap energy issues, with the overall aggregate dollar 12-month cuts rising 157% over the prior 12-month period. Yet, the over-all dividend increases continue to outweigh the decreases. So the outlook remains positive.


Energy and Materials issues are expected to remain under pressure for 2016, potentially resulting in disappointing announcements for earnings, capital investments, buybacks and dividends. Assuming dividend policies remain unchanged, the U.S. equity market in 2016 is positioned to set another record in payments, especially in the S&P 500®, but the increase is seen as being in the mid-single digit range, not the double-digits seen over the past few years.


The good news for dividends is that, while things are difficult, the majority of issues continue to increase and have the resources to do so for the near future.

Large, Mid, Small Caps

Within the S&P 500®, 418 issues, or 82.8% currently pay a dividend. All 30 members of the Dow Jones Industrial Average® pay a dividend as well.

Within the S&P Mid Cap 400®, 69.3% of the issues within pay a cash dividend, a decrease from 70.3% in Q1 2016. Within the S&P Small Cap 600®, 51.4% of the issues pay a dividend, which is unchanged from Q1 2016.

Yields continued to vary amongst the various market indices.

Large-Caps at 2.17% (no change from the 2.17% in Q1 2016).

Mid-Caps at 1.68% (1.69% in Q1 2016).

Small-Caps at 1.38% (1.47% in Q1 2016).

The yields across dividend paying market-size classifications continue to be compatible, with large-caps coming in at 2.54% (the same as Q1 2016), mid-caps at 2.37% (2.36% in Q1 2016) and small-caps at 2.47% (2.50% in Q1 2016).


Leave a Reply

Your email address will not be published. Required fields are marked *