Broker Check

U.S. Economic Strength Drives Record Dividends

| October 14, 2019

A most-welcome sign of economic strength for investors is arriving as S&P 500 dividend payouts are expected to reach an all-time high of $122 billion in Q3 2019.

In the second quarter, the S&P 500 paid out $118.68 billion in cash dividends (based on preliminary data). The all-time high of $119.81 billion was set in Q4 2018. As you can see, the dividend payout trend since this economic recovery began has been extremely positive:

If expectations hold true, and there’s little reason to think they won’t, this will be the eleventh straight quarter of $100+ billion in cash dividend payouts. The average over the last decade has been $83.51 billion paid out per quarter.

The low point was in Q3 2009. Since then, the S&P 500’s dividend payouts have increased by a 151.39 percent margin.

Four sectors have primarily contributed to the dividend growth – information technology, financials, health care, and consumer staples. These four sectors are responsible for almost half of all the dividends paid out since 2009.

Dividends Reflect a Strong Economy

Cornerstone’s take on this is investors should be ecstatic about the growth and size of S&P 500 dividend payouts. The continuing boosts of dividend distributions indicate our economy and corporate America are strong.

Strong balance sheets and solid cash flow are driving dividend growth. Believe me, companies wouldn’t increase their dividends if things were going poorly.

When things are good, equity gets returned to investors. And it’s being returned at record levels right now.

Securities sold through CoreCap Investments, Inc., a registered broker-dealer and member FINRA/SIPC; advisory services offered by CoreCap Advisors, Inc., a registered investment advisor. Cornerstone Financial and CoreCap are separate and unaffiliated entities.