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Companies listed in the Standard & Poor’s 500 stock index paid out a record $140.6 billion in dividends to shareholders in this year’s second quarter, Dow Jones S&P Indices (DJSPI) reported.
The first quarter’s payout was $137.6 billion; companies doled out $123.4 billion in 2021’s second quarter.
Dividends also should set records for this quarter and for the year, DJSPI senior analyst Howard Silverblatt predicted in a Wall Street Journal interview.
Sales are strong and corporations are expected to share their fatter profits with stockholders, he said.
If companies see revenues shrink, they would halt stock buybacks before cutting dividends, he contends.
“You don’t want to tell the world you have a cash flow problem,” he said.
“Businesses want to send a message that they are in good health,” Brian Jacobsen, a senior strategist at Allspring Global Investments, told the WSJ.
“If they can maintain and grow their dividends despite the challenges, that tends to signal that they’re confident about their business outlook,” he added.
TRENDPOST: While equity markets have bounced back from their lows, the NASDAQ is still in bear territory and the S&P are floating near it and the Dow is not too far away from sinking 20 percent from their highs. Bond prices have also slipped down.
Thus, the only investment component to turn in a positive performance during this year’s first half are dividends… which cheers up investors to stay in the markets.