Standard & Poor’s 500 Index companies have never paid more dividends following increases this week by banks including JPMorgan Chase & Co., according to Howard Silverblatt, S&P’s senior index analyst.
Announced payouts imply an annual dividend rate of $29.02 per index share, Silverblatt said in a note today. The prior record was $28.96 in June 2008 before the figure slid 26 percent to $21.44 in August 2009. It has since risen 35 percent. S&P 500 companies are paying out 30 percent of profits, less than the average of 52 percent, S&P data show.
“Companies have the money, they have the ability, and dividends are back in fashion,” he said in a telephone interview today. “We would expect to see more banks.”
JPMorgan boosted its quarterly dividend by 20 percent to 30 cents a share this week, after the Federal Reserve completed stress tests of the 19 largest U.S. banks to gauge their ability to withstand another severe economic downturn. Wells Fargo & Co. and U.S. Bancorp also boosted their payouts and authorized share repurchases.
Financial stocks in 2007 accounted for 30 percent of S&P 500 dividends, he said. The amount has fallen to 13 percent, which is the second-highest among 10 industries, according to S&P data. The consumer-staples group contributes 15 percent.