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Tip Sheet
Tip Sheet Archive
Overview
High Dividend Yield
High Yield DJIA30
High Yield TSX60
Dividends at Risk
Dividend Risk DJIA30
Dividend Risk TSX60
Value Ratio Approach
Value Ratio DJIA30
Value Ratio TSX60
Graham's Approach
Graham DJIA30
Graham TSX60
Other Screens
Low P/E DJIA
Low P/E TSX60
Low P/B DJIA
Low P/B TSX60
Low P/S DJIA
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Stingy Investor Tip Sheet
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| Dividend Downturn |
An article
in the Economist discusses opportunities in the dividend swap market.
But, as a regular dividend investor, I was alarmed when the author
revealed that "American dividends more than halved between 1929 and
1931." That's a whopper of a dividend decline.
It also reminded me that I have data for the S&P500 (or more
accurately its predecessor indexes) close at hand. So, I took a look
at the dividend carnage by creating two graphs. The first graph shows
the absolute value of the S&P500's dividend payments in the early
years. The second shows its dividend yield.
As you can see, the Economist was right. Dividend payments declined
precipitously after a peak in 1930. From top to bottom, the S&P500's
dividend rate plunged from a high of $0.98 at the end of 1930 to a
low of $0.44 at the end of 1933.
The big dividend-yield spike in 1932 occurred when the dividend
payments had already fallen to $0.66. It also happens the highest
yields coincided with the bottom of the 1929-1932 bear market.
As a fan of dividend stocks, I sure hope we don't see similar dividend
reductions this time around.
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| | 02/02/2009 11:45 PM EST Permlink save & share | Dividends |
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| Disclaimers: Consult with a
qualified investment adviser before trading. Past performance is a
poor indicator of future performance. The information on this site,
and in its related newsletters, is not intended to be, nor does it
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other way. More...
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