NEW YORK, Nov. 7 /PRNewswire/ — Standard & Poor's, the world's leading index provider, announced today that it is raising the indicated dividend rate on the S&P 500 from $21.80 to $22.70, and that it expects cash dividends to set another record in 2005 - paying out $21.85 per share versus $19.44 paid out in 2004. The 12.4% increase in dividend payments translates into a $203 billion aggregate payment for S&P 500 companies in 2005.
"At the end of 2004, 377 issues in the S&P 500 paid a dividend," says Howard Silverblatt, market equity analyst at Standard & Poor's. "We now have 386 issues paying dividends, with additional constituents having significant ability to increase and initiate. For 2006, we expect a continuation in both dividend increases and initiations among S&P 500 constituents, resulting in a double-digit gain in dividend payments."
Standard & Poor's notes that dividend increases continue to be dominated by financial companies, which represent 63 of the 256 increases in the S&P 500 so far in 2005. Also notable is that the tendency of S&P 500 issues to pay and continue to raise dividends is much greater than that of the general market. On average, over the past 15 years, 53% of the S&P 500 issues have annually increased their dividend payments, while only 23% of the non-S&P 500 constituents have done so. For 2005, the tendency within the S&P 500 has been even stronger, as 59% of the index (256 issues) have increased dividend payments versus 23% for non-S&P 500 companies.
Standard & Poor's also points out that the propensity for index issues to pay cash dividends is much higher than that of the general market. Currently 77.2% of the S&P 500 constituents pay cash dividends versus 40.9% for the non-S&P 500 general market.
Dividend Payers Versus Non-Payers
Standard & Poor's data shows that dividend payers continue to outperform non-payers in 2005. Year-to-date, through November 7th, payers have averaged a 5.29% gain compared to a 3.81% gain for non-payers. "Dividend issues are less volatile than those that don't pay dividends," explains Silverblatt. "During bull markets, paying issues tend to rise less, and during bear markets they decline to a smaller degree. The dividend acts very similar to an anchor by stabilizing the stock during periods of market volatility."
Dividend Aristocrats
Standard & Poor's also released data on the S&P 500 DividendAristocrats, a list of those companies within the S&P 500 that have increased their actual dividend payments in each of the last 25 years. Year-to-date, 45 of the 58 S&P 500 DividendAristocrats have increased their dividend rate. For more information on the DividendAristocrats, as well as access to a supplementary list of 28 non-S&P 500 issues, please visit http://www.indices.standardandpoors.com/.
YEAR ISSUES % OF YEAR ISSUES % OF
END WITH INDICATED ISSUES END WITH INDICATED ISSUES
DIVIDEND RATES DIVIDEND RATES
11/07/2005 386 77.2% 1992 436 87.2%
2004 377 75.4% 1991 434 86.8%
2003 370 74.0% 1990 438 87.6%
2002 351 70.2% 1989 437 87.4%
2001 351 70.2% 1988 432 86.4%
2000 372 74.4% 1987 429 85.8%
1999 402 80.4% 1986 426 85.2%
1998 418 83.6% 1985 442 88.4%
1997 427 85.4% 1984 446 89.2%
1996 428 85.6% 1983 454 90.8%
1995 432 86.4% 1982 458 91.6%
1994 436 87.2% 1981 462 92.4%
1993 435 87.0% 1980 469 93.8%
PERIOD FAVORABLE FAVORABLE
S&P 500 Non-S&P 500
BASE
2005 Estimate 55.40% 27.80%
2004 54.20% 29.66%
2003 45.40% 27.96%
2002 39.40% 21.89%
2001 40.40% 18.85%
2000 44.40% 18.38%
1999 48.40% 19.94%
1998 54.80% 21.32%
1997 58.00% 21.45%
1996 60.00% 22.53%
1995 61.00% 23.59%
1994 56.60% 23.84%
1993 54.80% 22.09%
1992 55.00% 22.83%
1991 54.00% 20.72%
1990 63.80% 27.46%
1989 69.20% 29.42%
1988 68.00% 31.84%
About Standard & Poor's
Standard & Poor's, a division of The McGraw-Hill Companies (NYSE:MHP), is the world's foremost provider of independent credit ratings, indices, risk evaluation, investment research and data. With approximately 6,300 employees located in 20 countries and markets, Standard & Poor's is an essential part of the world's financial infrastructure and has played a leading role for more than 140 years in providing investors with the independent benchmarks they need to feel more confident about their investment and financial decisions. For more information, visit http://www.standardandpoors.com/.
CONTACT:
David Guarino
Communications
212 438 1471
dave_guarino@standardandpoors.com
Howard Silverblatt
Market Equity Analyst
212 438 3916
howard_silverblatt@standardandpoors.com
